Dan owns a factory that manufactures smartphones.He has a lot of costs every month to keep his factory running.Which of the following is one of Dan's fixed costs?

Question

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Fixed costs are expenses that do not change, regardless of the level of production or sales. Mortgage payments are a typical example of a fixed cost as they must be paid regardless of how many smartphones are produced or sold. A) and D) are examples of variable costs as they are directly tied to the production of smartphones. B) could potentially be a fixed or variable cost, depending on whether the factory's electricity usage is consistent or varies with the level of production.

Dan Owns a Factory That Manufactures Smartphones