Which of the following is a fixed cost for an automobile manufacturing plant?
A) amortization on factory equipment
B) electricity used by assembly-line machines
C) sales commissions
D) windows for each car produced
E) labour cost of assembly line workers

Question

Quizplus · Accepted Answer

Amortization on factory equipment is a fixed cost as it is a non-cash expense that is spread over the useful life of the equipment, and does not vary with the level of production. The other options listed are variable costs, as they would increase or decrease with changes in production levels.

Which of the Following Is a Fixed Cost for an Automobile