Question

which of the following is most likely to be a fixed cost for a business?
a. materials costs
b. expenditures on low - skill labor
c. property taxes on the firms buildings
d. shipping charges for the delivery of products

Explanation:

Fixed costs are business expenses that do not change with the level of production or sales volume.

• Materials costs (a) vary with production output, so they are variable costs.
• Expenditures on low-skill labor (b) often change with production needs, making them variable.
• Property taxes on buildings (c) are a set amount paid regardless of how much the business produces or sells, so they are fixed costs.
• Shipping charges (d) depend on the number of products delivered, so they are variable costs.

Answer:

c. property taxes on the firm's buildings