Which of the following is most likely to be a fixed cost for a company?
A)Sales commissions.
B)Depreciation on factory equipment
C)The cost of materials used in production.
D)The cost of shipping finished goods.

Question

Quizplus · Accepted Answer

Fixed costs are those expenses that do not vary with changes in the volume of goods or services produced or sold by a company. Depreciation on factory equipment is a fixed cost because it is a non-cash expense that remains constant over time and does not vary with changes in production levels. sales commissions are a variable cost because they are a percentage of sales and will increase or decrease based on sales levels. The cost of materials used in production and the cost of shipping finished goods are both variable costs because they increase or decrease with changes in production levels.

Which of the Following Is Most Likely to Be a Fixed