Question

All of the following are considered components of fixed costs EXCEPT?

1) Cost of land
2) Equipment
3) Insurance
4) Utilities

Answer 1

The components of fixed costs include the cost of land, equipment, insurance, and utilities.

Step-by-step explanation:

The components of fixed costs include the cost of land, equipment, insurance, and utilities. These costs do not change regardless of the level of production and are necessary for the operation of a business or factory. The cost of land is an example of a fixed cost because it remains the same once a lease is signed. Similarly, equipment, insurance, and utilities are fixed costs because they are necessary expenses regardless of the level of production.