Use the information below to answer the following question(s).Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Which one of the following is a variable cost for an insurance company?
A)rent
B)president's salary
C)sales commissions
D)property taxes
E)amortization on the office equipment

Question

Use the information below to answer the following question(s).Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
  Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Which one of the following is a variable cost for an insurance company?
A)rent 
B)president's salary 
C)sales commissions 
D)property taxes 
E)amortization on the office equipment

Quizplus · Accepted Answer

Sales commissions are a variable cost for an insurance company because they are directly tied to the amount of sales made. As sales increase, commissions paid also increase. Rent, president's salary, property taxes, and amortization on office equipment are all fixed costs for the company.

Use the Information Below to Answer the Following Question(s)