Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs?

Question

Quizplus · Accepted Answer

Fixed costs are those that do not change with the level of production or sales. The cost of bookkeeping services is a fixed cost because it remains constant regardless of the number of hotdogs sold. The cost of mustard and hotdog buns are variable costs because they increase as more hotdogs are sold. Wages paid to workers who sell hotdogs are also considered variable costs because they increase with the number of hotdogs sold or the amount of time worked.

Harry's Hotdogs Is a Small Street Vendor Business Owned by Harry