Question

Which of the following costs of publishing a book is a fixed cost?

a. author royalties of 5% per book
b. the costs of paper and binding
c. shipping and postage expenses
d. composition, typesetting, and jacket design for the book

Answer 1

The costs like author royalties, cost of paper and shipping expenses all are depend on amount of books produced . Hence cost like typesetting and jacket design are come in fixed cost

Step-by-step explanation:

Fixed cost are those costs that are not change on the basis of quantities of product produced. These costs are not influence by increasing and decreasing of goods produced.

These costs are paid as fixed payment by company with irrespective of amount of goods produced.

The costs like author royalties, cost of paper and shipping expenses all are depend on amount of books produced . Hence cost like typesetting and jacket design are come in fixed cost

Answer 2

The correct answer is option d.

Step-by-step explanation:

The fixed costs incurred in the production process of a good or service is the cost incurred on the fixed factors. These factors cannot be varied in the short run.

Fixed cost does not depend on the level of output. It does not change with the change in the volume of output.

In the given example, the cost incurred on the composition typesetting and jacket design for the book does not change with the volume of output. So these costs are the foxed cost involved in publishing a book.