Question

Fixed expenses: a. includes labor, raw materials, and commissions. b. can be estimated by taking into consideration the production. c. are incurred regardless of sales volume. d. must be linked to strategy in the business plan

Answer 1

Answer:

c. are incurred regardless of sales volume

Explanation:

Fixed costs are expenditures that do not vary with changes in production level.  They are the costs that remain constant throughout a financial period. A business will incur fixed costs as long as it's operational regardless of its output or sales level.

Examples of fixed costs are rent, depreciation, salaries, and insurance costs. The majority of overhead costs and indirect costs make up the fixed costs.  Variable cost contrasts fixed costs as they increase or decrease as production level changes.