All the following are examples of fixed costs except–
(A) insurance fee
(B) rent payments
(C) director's fees
(D) license' fees on a product sold
Answers
let us discuss meaning of fixed cost ,
A periodic cost that remains more or less unchanged irrespective of the output level or sales revenue, such as depreciation, insurance, interest, rent, salaries, and wages.
as per definition says cost which remains unchanged irrespective of the output is fixed cost
lets us analysis options given in the question is whether fixed cost or variable cost
1) insurance fee is a periodic payment paid regularly irrespective of production of goods , therefore its fixed cost
2)rent payments also a paid monthly even though no production made therefore its fixed cost
3)directors fees also a fees paid monthly for the services he made . he may incur same amount of fees whether production happens or not therefore its fixed cost
4)licence fees on product sold , this cost depends upon the production and sales therefore it varies according to output therefore its variable cost
therefore correct answer option (d) which is not a fixed cost .
Hope its useful