Commercial Applications
Rent of an office premises is an example of ……………
- Semi-variable Cost
- Semi-fixed Cost
- Fixed Cost
- Variable Cost
Answer
Fixed Cost
Reason — Rent of office premises is paid at a fixed amount per month (or per year) regardless of the level of business activity, sales or production. It does not change with the volume of output and remains the same even if production is zero. Hence it is a fixed cost. (Other classic examples of fixed cost include insurance premium, depreciation of plant and managerial salaries.)
Related Questions
Direct cost increases when ……………
- Sales price of product increases
- Cost of raw material increases
- Tax increases
- Subsidy increases
Cost means:
- Revenue paid for something
- Price paid for something
- To generate expenses
- Depreciation earned
Sacrifice made to acquire something is called as ……………
- Cost
- Price
- Revenue
- Expense
Costs incurred other than on material and labour for production and distribution are called ……………
- Labour cost
- Material cost
- Expense
- Variable cost