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:

Rate of Return

The profit or deficit incurred on an investment during a certain period, shown as a percentage of the original investment amount.

Target Cost

The maximum amount that can be spent on a product to ensure a desired profit margin is achieved.

Market Dictated Price

The price of a good or service as determined by the supply and demand dynamics in the open market.

Markup Percentage

A percentage added to the cost price of goods to cover overhead and profit.