Which of the following would be classified as a fixed cost for the local supermarket?
A) The cost of the boxes of cereal sold in the store.
B) The salary and any overtime paid the store's manager.
C) The rent from the six-year lease for the building the store uses.
D) The Social Security tax the store pays the federal government on the workers' income.

Question

Quizplus · Accepted Answer

Fixed costs are expenses that do not change with the level of goods or services produced. The rent from the six-year lease is a fixed cost because it remains constant regardless of the supermarket's sales volume.

Which of the Following Would Be Classified as a Fixed