ECONOMICS

Detailed explanation-1: -The cost of electricity is an indirect cost since it can’t be tied back to the product or the specific machine. However, the cost of electricity is a variable cost since electricity usage increases with the number of products that are produced or manufactured.

Detailed explanation-2: -Fixed cost refers to the cost of a business expense that doesn’t change even with an increase or decrease in the number of goods and services produced or sold. Fixed costs are commonly related to recurring expenses not directly related to production, such as rent, interest payments, and insurance.

Detailed explanation-3: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments.

Detailed explanation-4: -Fixed costs are costs that a firm will incur regardless of its output and are sometimes referred to as overhead. These can be costs such as insurance, rent, utilities and others. These costs are incurred even if the company doesn’t generate revenue.