Which of the following would NOT be considered a fixed cost of production?
A) Wages paid to labor
B) The opportunity cost of capital
C) Interest payments on a loan
D) Insurance payments on plant and equipment

Question

Quizplus · Accepted Answer

Wages paid to labor are not considered a fixed cost of production since they vary with the level of output. Fixed costs are those that do not vary with the level of output, such as rent, insurance payments on plant and equipment, property taxes, and interest payments on a loan. The opportunity cost of capital is also considered a fixed cost, as it represents the cost of using funds invested in the business or borrowed at a fixed rate of interest.

Which of the Following Would NOT Be Considered a Fixed