Which of the following is an example of a fixed cost?

₹0.0

Question: Which of the following is an example of a fixed cost?

Options:

Correct Answer: Rent

Solution:

Rent is an example of a fixed cost, as it does not change with the level of production or sales.

Which of the following is an example of a fixed cost?

Which of the following is an example of a fixed cost?

Step 1: Understand what a fixed cost is. A fixed cost is an expense that does not change regardless of how much you produce or sell.
Step 2: Think of examples of fixed costs. Common examples include rent, salaries, and insurance.
Step 3: Identify the example given in the question. The question asks for an example of a fixed cost.
Step 4: Recognize that rent is a cost that stays the same every month, no matter how much you sell or produce.
Step 5: Conclude that rent is indeed a fixed cost because it does not vary with production or sales.

No concepts available.