Which of the Following Would Be an Example of a Fixed

question 312

Multiple Choice

Which of the following would be an example of a fixed cost to a firm?

• A) rent for the building it occupies
• B) wages for the laborers
• C) the cost of raw materials
• D) electricity and other fuel costs

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Definitions:

Variable

A quantity or element that is subject to change, often used in mathematical equations or experiments to represent changeable factors.

Contribution Format

A type of income statement where costs are segregated into variable and fixed categories, emphasizing cost behavior and contribution margin.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material and labor expenses.

Merchandising Company

A business that purchases finished products and sells them to consumers without further processing.