Jodi Recently Went into Business Producing Widgets

question 78

Multiple Choice

Jodi recently went into business producing widgets. Which of the following would be a fixed cost for her firm?
1. labour costs are $1000 per month
2. raw material costs are $5000 per month
3. a one- year lease on a building is $12 000

• A) 1 only
• B) 2 only
• C) 3 only
• D) 1 and 2
• E) 2 and 3

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Definitions:

Unlimited Liability

A legal structure in which the owners of a business are personally responsible for all the debts and obligations of the business, without any limit.

Legal Requirements

Regulations or obligations imposed by law that organizations or individuals must follow.

Governmental Regulation

The laws, rules, and regulations established by government bodies to control activities within various sectors and protect public interests.

Capital Contributions

The money, property, or other assets that an owner or shareholder provides to a business either initially or to support ongoing operations.