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Which of the following are not fixed costs?
By BYJU'S Exam Prep
Updated on: September 25th, 2023
(A) Rent on land
(B) Municipal taxes
(C) Wages paid to workers
(D) Insurance charges
Wages paid to workers are not fixed costs. To answer this question, you need to know what Fixed cost is. A fixed cost is a cost or expense that is constant regardless of how many products or services are produced or sold.
Table of content
Explain Fixed Costs
Fixed costs are the costs that do not change with output change. They are constant at all levels of output. For instance: The salary of the staff and rent of the factory, etc. We have mentioned few points below to help you.
- Workers’ salaries are not regarded as fixed costs as it will change based on the performance and profit gained.
- Fixed costs are considered company expenses in economics. It is independent of the volume of products or services the company produces.
- They are frequently referred to as overhead costs and are time-related, such as monthly rent or a wage.
- Some employees receive their salaries in monthly installments.
- This price is set. On the other hand, hourly salaries provided to employees might frequently change, making this kind of labor cost a variable cost.
Summary:
Which of the following are not fixed costs? (A) Rent on land (B) Municipal taxes (C) Wages paid to workers (D) Insurance charges
Workers’ salaries are not fixed costs. No matter how many goods or services are produced or sold, a fixed cost is an expense that never changes.