Which of the following is not a Fixed Cost?
A) Insurance
B) Salaries
C) Depreciation
D) Direct Materials
Answers
Answered by
5
answer D is the correct option
Direct materials are the material that are raw and after many process it is converted into finished product.
it not has a fixed cost and it changes costs according to quality
Direct materials are the material that are raw and after many process it is converted into finished product.
it not has a fixed cost and it changes costs according to quality
Answered by
1
Answer:
Option (D) Direct Materials.
Explanation:
In economic terms, the expenses which are independent on the amount of goods or products manufactured by the business are called as 'Fixed Cost'.
Examples of fixed cost are the expenses that do not change for a short duration of time irrespective of the changes in the business. They are Insurance premium, Employee Salary, Depreciation, Amortization, House rent, etc.,
Direct Materials cost is the expense of the direct supplies and materials (raw materials) used in the product manufacturing. When the level of manufacturing is increased, the direct materials cost also increases. It is not a fixed cost.
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