Sweet Time Candies projects its factory rent to be $8,000 in August when 4,000 pounds of candy are expected to be produced.If rent is a fixed cost, and if production is expected to increase to 6,000 units in September, what is the expected cost of rent in September?
A)$12,000
B)$8,000
C)$7,000
D)Not enough information is provided to determine the answer.

Question

Quizplus · Accepted Answer

Since rent is a fixed cost, it does not change with changes in production quantity. Therefore, the expected cost of rent in September will also be $8,000.

Sweet Time Candies Projects Its Factory Rent to Be $8,000