Which of the following costs is an example of a fixed cost?
A)Salary of plant manager
B)Sales commissions
C)Direct materials
D)Delivery costs

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with changes in the level of production or sales volume. The salary of a plant manager is a fixed cost because it is a set amount paid to a managerial employee regardless of the amount of goods produced or sold. Sales commissions, direct materials, and delivery costs are examples of variable costs because they will increase or decrease proportionally with changes in production or sales volume.

Which of the Following Costs Is an Example of a Fixed