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__________ is not a fixed cost.a.monthly rent of $1,000 contractually specified in a one-year leaseb.an insurance premium of $50 per year, paid last monthc.an attorney's retainer of $50,000 per yeard.a worker's wage of $15 per hour

Question

__________ is not a fixed cost.a.monthly rent of 1,000contractuallyspecifiedinaoneyearleaseb.aninsurancepremiumof1,000 contractually specified in a one-year leaseb.an insurance premium of 50 per year, paid last monthc.an attorney's retainer of 50,000peryeard.aworkerswageof50,000 per yeard.a worker's wage of 15 per hour

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Solution

The answer is d. a worker's wage of $15 per hour.

Here's why:

a. Monthly rent of $1,000 contractually specified in a one-year lease: This is a fixed cost because it is a set amount that must be paid every month, regardless of the level of output.

b. An insurance premium of $50 per year, paid last month: This is also a fixed cost because it is a set amount that must be paid annually, regardless of the level of output.

c. An attorney's retainer of $50,000 per year: This is a fixed cost because it is a set amount that must be paid annually, regardless of the level of output.

d. A worker's wage of $15 per hour: This is not a fixed cost because it can vary depending on the number of hours the worker is needed. If more products need to be produced, more hours may be needed, increasing the cost. If fewer products need to be produced, fewer hours may be needed, decreasing the cost. Therefore, this cost is variable, not fixed.

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