Which of the following is a fixed cost?
A)electricity
B)worker bonuses
C)mortgage on the building
D)steel to produce refrigerators

Question

Which of the following is a fixed cost?
A)electricity 
B)worker bonuses 
C)mortgage on the building 
D)steel to produce refrigerators

Quizplus · Accepted Answer

A fixed cost is a cost that doesn't change, regardless of the level of production or sales. The mortgage on the building is a fixed cost because it is an ongoing expense that is not affected by the amount of refrigerators that are produced or sold. Electricity and steel are variable costs because their cost will change depending on the amount of refrigerators produced. Worker bonuses are a discretionary expense, meaning they are not required and can be adjusted based on company performance.

Which of the Following Is a Fixed Cost