Question: Which of the following is a fixed cost?
Options:
Cost of seed
Cost of fertilizer
Wages of permanent labor
Cost of manure
✅Explanation:
Fixed costs are expenses that remain constant regardless of the level of production output.
-Wages of permanent labor:Permanent employees receive a regular salary, which does not fluctuate with changes in production levels. Therefore, it is considered a fixed cost.
Fixed costs are expenses that remain constant regardless of the level of production output.
-Wages of permanent labor:Permanent employees receive a regular salary, which does not fluctuate with changes in production levels. Therefore, it is considered a fixed cost.
📌Other Options:
-Cost of seed:This is a variable cost, as the amount of seed required will change depending on the quantity of crops being planted.
-Cost of fertilizer:This is also a variable cost, as the amount of fertilizer needed will vary based on the size of the area being cultivated and the specific crop requirements.
-Cost of manure:Similar to fertilizer, this is a variable cost as the amount needed will depend on the size of the land and the specific crop requirements.