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Andreyy89
3 years ago
14

Parker Industries is a small company with a big name! Parker Industries is actually a one-person company that imports strands of

LED lights from China and sells them through its website. Parker's only overhead is a storage unit for inventory that costs $125 a month and a $25 monthly fee for website hosting. Currently, Parker imports the lights for $.99 each (including inbound shipping) and sells them for $4.49. Parker also pays shipping expenses of $.50 per light strand. What is Parker's monthly fixed costs?
a.

$150

b.

$.99

c.

$1.49

d.

$125
Business
1 answer:
Tamiku [17]3 years ago
7 0

Answer:

Total fixed costs= $150

Explanation:

Giving the following information:

Parker's only overhead is a storage unit for the inventory that costs $125 a month and a $25 monthly fee for website hosting.

<u>A cost is categorized as fixed because it does not vary with production (in relevant ranges).</u>

In this case, the only two cost that is fixed is the storage and website hosting.

Total fixed costs= 125 + 25= $150

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