Explain Whether Each of the Following Is a Fixed Cost

question 200

Essay

Explain whether each of the following is a fixed cost or a variable cost for Damian Dandridge's tattoo parlour.
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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Recognize the biological markers and definitions of puberty and menarche.

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Definitions:

Cash Break-Even

The sales level where operating cash flow is equal to zero.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and loan payments.

Selling Price

The amount at which a product or service is offered to the market.

Variable Cost

Expenses that change in proportion to the activity or volume of a business, such as raw materials and labor costs directly tied to production levels.