Question

6.An example of a fixed cost is when _____.A.an office supply store charges $3.99 for a ream of paper as its everyday low priceB.a company pays all the secretaries the same base salary and gives them the same cost-of-living increaseC.acompany pays the same amount of rent every month for the use of a manufacturing plantD.a company does not raise the price of its service contract on photocopy machines for 10 years

Answer 1

Answer: C)

Explanation:

• Fixed prices and costs are not changing over time and they are not depending on the level of services, stuff or goods that are increasing the business of the company. They are often time-related, in this case, every month. The company is paying one same amount of rent and that price is not changing during those months when it has to be paid.

Fixed costs are considering, for example, insurance, property taxes, rent, salaries and more.