Martin Shores, Inc. is facing ﬁnancial diﬃculties and has ceased production. Management realizes that the ﬁrm will still incur $15,000 of costs each month until such time as the ﬁrm is sold. This
$15,000 represents the _____ costs of the ﬁrm's operations.
A) Total.
B) Fixed.
C) Variable.
D) Net.
E) Contribution.

Question

Quizplus · Accepted Answer

The $15,000 represents the fixed costs of the firm's operations, as they do not vary with the level of production or sales.