Fixed Costs Include

question 113

Multiple Choice

Fixed costs include:

• A) top management salaries.
• B) wage rates set by contract.
• C) salaries of production workers.
• D) costs of electricity used in production.

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Definitions:

Mixed Costs

Expenses that have both fixed and variable components, changing with the level of production or sales activity but not in direct proportion.

Differential Costs

The difference in cost between two alternative decisions or changes in levels of operation.

Variable

An element that can change or vary, often used in mathematical modeling, programming, and statistical analysis to represent changeable data.

Committed Fixed Costs

Long-term fixed costs that cannot be easily altered in the short term, such as leases, insurance, and salaries for permanent staff.