Question

Java Joe's operates a chain of coffee shops. The company pays rent of $12,000 per year for each shop. Supplies (napkins, bags, and condiments) are purchased as needed. The manager of each shop is paid a salary of $2000 per month, and all other employees are paid on an hourly basis. Relative to the number of customers for a shop, the cost of rent is which kind of cost.-fixed cost-variable cost-mixed cost-relevant cost

Answer 1

Answer: Cost of rent is fixed cost

Explanation: Fixed cost are those cost which do not change with the change in level of output. Fixed cost are also termed as indirect costs or overheads.

Unlike variable costs, which are output dependent, Fixed costs are usually time dependent. Factory rent and office expenses are two of its many examples.