Question

____ costs are the costs incurred whether or not the crop is produced. These include depreciation, insurance, interest, repairs, and taxes? a. Variable costs b. Fixed costs c. Operating costs d. Overhead costs

Answer 1

Step-by-step explanation:

he correct answer is b. Fixed costs.

Fixed costs are the costs that remain constant regardless of the level of production. These costs are incurred whether or not the crop is produced. Examples of fixed costs in agricultural operations include depreciation of machinery, insurance premiums, interest on loans, repairs and maintenance, and property taxes.

Unlike variable costs that vary with production levels (such as seed, fertilizer, and labor), fixed costs do not change in the short term. They are the expenses that a farmer or business owner must pay regardless of the output or sales volume. Fixed costs are an important consideration in budgeting and financial planning as they contribute to the overall cost structure of the operation.