Which of the following is an example of a fixed cost for a fishing company?
A) The cost of hiring a fishing crew.
B) The fuel costs of running the boat.
C) The monthly loan payment on the boat.
D) The supply of nets, hooks, and fishing lines.

Question

Quizplus · Accepted Answer

A fixed cost is a cost that does not vary with the level of production. The monthly loan payment for the boat is a fixed cost as it remains the same regardless of how many fish the company catches. The cost of hiring a fishing crew and the supply of nets, hooks, and fishing lines may vary depending on the level of production and are therefore considered variable costs. The fuel costs of running the boat can be considered a mixed cost as it has both fixed and variable components.

Which of the Following Is an Example of a Fixed