A Hotel Room That Goes Unrented and an Airline Seat

question 4

True/False

A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishable inventory in services.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or output, such as rent, salaries, and insurance.

Variable Costs

Variable costs are expenses that change in proportion to the level of production or business activity.

Average Fixed Costs

The total fixed costs of production divided by the number of units produced, representing the fixed cost per unit of output.

Total Costs

encompass all expenses incurred in the production of goods or services, including both fixed and variable costs.