Question

Which of the following are most likely fixed costs?

- administrative salaries
- electricity to operate factory machines
- factory rent
- factory insurance

Answer 1

Fixed costs include factory rent, administrative salaries, and factory insurance.

Step-by-step explanation:

Fixed costs are expenditures that do not change regardless of the level of production. One example is the factory rent which remains the same once the lease is signed, regardless of how much the factory produces. Other fixed costs include administrative salaries and factory insurance.