Which is an example of fixed costs?

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Multiple Choice

Which is an example of fixed costs?

Explanation:
Fixed costs stay the same in total regardless of how much you produce or sell, at least within the relevant range. Rent fits this because you typically pay the same amount every period whether you’re producing a lot or a little. Wages based on hours, commissions, and raw materials all change with activity—labor hours vary with production, commissions depend on sales, and materials rise or fall with output. So the example of a fixed cost is rent.

Fixed costs stay the same in total regardless of how much you produce or sell, at least within the relevant range. Rent fits this because you typically pay the same amount every period whether you’re producing a lot or a little. Wages based on hours, commissions, and raw materials all change with activity—labor hours vary with production, commissions depend on sales, and materials rise or fall with output. So the example of a fixed cost is rent.

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