ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Fixed cost
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Running cost
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Asset
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None of the above
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Detailed explanation-1: -Fixed costs are associated with the basic operating and overhead costs of a business. They include items such as building rent, utilities, wages, and insurance. Most forms of depreciation and tangible assets qualify as fixed costs as well. Fixed costs are considered indirect costs of production.
Detailed explanation-2: -Examples of committed fixed costs include investments in assets such as buildings and equipment, real estate taxes, insurance expense and some top-level manager salaries.
Detailed explanation-3: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments.
Detailed explanation-4: -Yes, depreciation is a fixed cost. It is a recurring cost that is typically the same amount every period, according to Accounting Tools. Depreciation isn’t usually affected by output. Buildings and machinery depreciate in value.