Question

A fruit packing plant usually shuts down for three months each year. during that period, what happens to its costs? its fixed costs are greater than zero. its variable costs are greater than zero. its total costs are zero. its fixed costs are zero.

Answer 1

During the three-month period, the plant is not able to produce anything because it shut down. Hence, its variable cost is equal to zero, however, during this period, the fixed cost is still greater than zero because of the process that needs to be done in order to ensure that once the plant is restarted. 

For the reason stated above, the most likely answer to this item is the first choice.