Explain Whether Each of the Following Is a Fixed Cost

question 303

Essay

Explain whether each of the following is a fixed cost or a variable cost for Damian Dandridge's tattoo parlor.
a.The payment he makes to buy tattoo ink.
b.The wages he pays his employees.
c.The $500-per-month payment he makes to advertise his shop on highway billboards.
d.The lease payment he makes to the landlord who owns the building where his shop is located.
e.The payment he makes on his liability insurance policy.

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Definitions:

Production Management

The process of planning, organizing, leading, and controlling the production of goods and services, focusing on efficient and effective production methods.

Final Customer

The end-user or consumer who purchases a product or service for their own use, as opposed to purchasing for resale or manufacturing purposes.

Non-financial Measures

Performance indicators not expressed in monetary units but qualitatively, such as customer satisfaction or employee engagement.

Operational Level

Pertains to day-to-day activities and decisions within an organization that ensure tasks and operations are performed efficiently.