Fixed costs include:
A) top management salaries.
B) wage rates set by contract.
C) salaries of production workers.
D) costs of electricity used in production.

Question

Quizplus · Accepted Answer

Fixed costs are expenses that remain constant regardless of the level of production, and top management salaries are general overhead costs that are not affected by changes in production levels.

Answer: B 
 Wage rates set by contract are also fixed costs, as they are predetermined and do not change based on changes in production levels.

Answer: C and D 
 Salaries of production workers and costs of electricity used in production are variable costs, as they are directly tied to the level of production.

Fixed Costs Include