Question

Which of the following would NOT usually be considered a fixed cost?

A.Insurance
B.Plant depreciation
C.Syringes used in a hospital
D.Managers' salaries

Answer 1

Syringes used in a hospital are a variable cost, not a fixed cost because their use and cost depend on the level of hospital activity and vary over time, unlike fixed costs that remain constant regardless of production levels.

Step-by-step explanation:

Out of the options given, syringes used in a hospital would NOT usually be considered a fixed cost. Fixed costs are expenditures that do not change regardless of the level of production, such as insurance, plant depreciation, and managers' salaries. In contrast, syringes are variable costs because the amount used depends on the number of patients and treatments provided, which can vary from period to period. Hence, they are not fixed costs as their usage and cost vary with hospital activity.