ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Fixed costs are expenses that a company pays that do not change with production levels. Rent is one example. Unlike fixed costs, variable costs (e.g., shipping) change based on the production levels of a company. Corporate Finance Institute.

Detailed explanation-2: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs.

Detailed explanation-3: -An example of fixed cost is a rent payment. If a company pays $5, 000 in rent per month, it remains the same even if there is no output for the month. Conversely, a variable cost is dependent on the production output level of goods and services.

Detailed explanation-4: -Fixed costs can include property taxes, rent, salaries and the cost of benefits for non-sales and management personnel.

Detailed explanation-5: -In the above scenario, Rent paid is the fixed cost. It is the type of cost which is not dependent on the business activity. read more because rent is to be paid at every level of production in the company, and the same does not change with the change in the level of production in the company.