An Example of a Fixed Cost Would Be

question 9

Multiple Choice

An example of a fixed cost would be

• A) shipping.
• B) raw materials.
• C) labour.
• D) monthly rent on office space.
• E) overtime.

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Definitions:

Inventory Period

The average time that inventory is held before it is sold or used in production.

Operating Cycle

Refers to the duration it takes for a company to buy goods or services, convert them into products, sell those products, and collect cash from the sales.

Effective Rate

The actual interest rate on an investment or loan, accounting for the effect of compounding over a given period.

Operating Loan

Loan negotiated with banks for day-to-day operations.