Question

_______________ costs typically include items such as rent, utilities, insurance, administrative salaries, and the depreciation of the physical plant and equipment.

Answer 1

The type of costs that typically include items like rent, utilities, insurance, among others, are: fixed costs.

What are Fixed Costs?

Fixed costs can be described as costs that remain constant regardless of the amount or volume of goods that is produced.

Some examples of fixed costs include:

• Rent
• Utilities
• Depreciation of the physical plant and equipment.
• Administrative salaries
• Insurance

All these costs, for a typical company or firm, are usually constant across reasonable fluctuations.

For example, if a bakery makes 50,000 loaves of bread or 100,000 loaves in a month, the rent that the bakery pays or the administrative salaries that are paid to its staff remains unchanged.

Thus, the type of costs that typically include items like rent, utilities, insurance, among others, are: fixed costs.

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