Question

Dizzy Amusement Park is open from 8:00 am till midnight every day of the year. Dizzy charges its patrons a daily entrance fee of $30 per person which gives them unlimited access to all of the park's 35 rides. Dizzy employees a certified operator for each of its 35 rides. Each operator is paid $20 per hour. The cost of the certified operators would best be described as a: Multiple Choice true variable cost step-variable cost mixed cost fixed cost

Answer 1

Answer:

D. fixed cost

Explanation:

The fixed cost in a business refers to those costs that are independent of the production output in the business. This means that to a large extent, these costs remain constant whether there is a decrease or increase in output and profit in the business.

In the case of Dizzy Amusement Park, the amount paid to each operator is a fixed cost accrued from the business. It is an agreed-upon price that must be paid whether the park records an increase or decrease in visitors. This kind of cost is in the same category as the rent and insurance fees accrued from the business.