Which of the following would be considered a fixed cost?
A) labor costs.
B) gas and electricity costs
C) costs of raw materials.
D) cost of fire insurance.

Question

Quizplus · Accepted Answer

A fixed cost is a cost that remains constant regardless of the level of production or sales. Fire insurance is a fixed cost because it is a fixed expense that the company must pay regularly regardless of how much output it produces. Labor costs, gas and electricity costs, and costs of raw materials are more likely to be variable costs.

Which of the Following Would Be Considered a Fixed Cost