Which two terms below best describe the wages paid to security guards that monitor a factory 24 hours a day?
A) variable cost and direct cost
B) fixed cost and direct cost
C) variable cost and indirect cost
D) fixed cost and indirect cost
E) value-added cost and direct cost

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not change with the level of production. Indirect costs are costs that are not directly related to the production of a product or service. Security guards that monitor a factory 24 hours a day are a fixed cost because their wages do not change with the level of production. They are also an indirect cost because they are not directly related to the production of the factory's products.

Which Two Terms Below Best Describe the Wages Paid to Security