Which of the Following Is Most Likely a Fixed Cost

question 2

Multiple Choice

Which of the following is most likely a fixed cost?

• A) sales representative commissions
• B) product distribution costs
• C) manufacturing input costs
• D) temporary worker salaries
• E) facility rental payments

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition and liquidity.

Payment Schedule

A plan that outlines the dates and amounts for payments due over a period.

CRA

Can refer to the Canada Revenue Agency, the agency responsible for the administration of tax laws for the Canadian government, or to the Community Reinvestment Act, a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities.

Bargain Purchase Option

A clause in a lease agreement that allows the lessee to purchase the leased asset at the end of the lease term for a price that is significantly lower than the expected market value.