An Example of a Cost Likely to Have a Fixed

question 15

Multiple Choice

An example of a cost likely to have a fixed behavior pattern is:

• A)sales force commission.
• B)production labor wages.
• C)advertising cost.
• D)electricity cost for packaging equipment.

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Definitions:

Interest

The cost of borrowing money or the payment received for lending money, usually expressed as an annual percentage of the principal amount.

Simple Interest

A way of calculating interest where the interest charge is based on the original principal only and does not compound.

Repaid

The action of paying back borrowed money to a lender, either in installments or as a lump sum.

Loans

Sums of money borrowed that are expected to be paid back with interest, often under agreed-upon terms between lenders and borrowers.