Which of the Following Is a Fixed Cost

question 178

Multiple Choice

Which of the following is a fixed cost?

• A)payment to hire a security worker to guard the gate to the factory around the clock
• B)wages to hire assembly line workers
• C)payments to an electric utility
• D)costs of raw materials

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Definitions:

Lease

A contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset for a specified period of time.

Agency

In legal terms, an agency refers to a relationship in which one party, known as the agent, is authorized to act on behalf of another party, known as the principal, in business transactions with third parties.

Privity Rule

A doctrine stating that only parties to a contract can sue or be sued on the contract's terms, restricting the rights of external parties.

Novation

A legal process by which an existing contract is replaced by a new contract, with the consent of all parties involved, often involving a change of parties or terms.