Which of the Following Would Be Classified as a Fixed

question 27

Multiple Choice

Which of the following would be classified as a fixed cost for the local supermarket?

• A) The rent for the six- year lease for the building the store uses
• B) The cost of the boxes of cereal sold in the store
• C) The payroll tax the store pays the government on the workers' income
• D) The salary and any overtime paid to the store's manager

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Definitions:

Fixed Cost

Expenses that do not change with the level of goods or services produced over the short term.

Monthly Demand

The total amount of a product or service that consumers want to purchase over the course of a single month.

Holding Cost

The costs linked to holding inventory that hasn't been sold, such as storage fees, insurance costs, depreciation, and the loss of potential income.

Cost Of Capital

The expense of obtaining funds or capital, through debt or equity, to finance an investment or project.