Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Warehouse rental, under existing contract
A)Variable cost
B)Fixed cost

Question

Quizplus · Accepted Answer

Warehouse rental costs usually fall under fixed costs because they are typically negotiated on a longer-term basis and do not vary with changes in activity levels. Once a contract is in place, the cost remains fixed regardless of how much or how little the warehouse is used.

Select the Appropriate Classification of Each of the Costs Listed