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Which three of the following are fixed costs of a manufacturing business? Select three answers: A Raw materials B Salaries of managers C Rent on premises D Packaging for products E Interest on a bank loan F Parts and components - Edexcel - GCSE Business - Question 3 - 2015 - Paper 1
Question 3
Which three of the following are fixed costs of a manufacturing business? Select three answers: A Raw materials B Salaries of managers C Rent on premises D Pack... show full transcript
Worked Solution & Example Answer:Which three of the following are fixed costs of a manufacturing business? Select three answers: A Raw materials B Salaries of managers C Rent on premises D Packaging for products E Interest on a bank loan F Parts and components - Edexcel - GCSE Business - Question 3 - 2015 - Paper 1
Step 1
Select three answers:
Answer
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Salaries of managers (B): This is a fixed cost as it does not vary with the level of production. Managers are typically paid a set salary regardless of how many products the business makes.
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Rent on premises (C): This expense is usually fixed since the business pays a consistent amount for leasing the space where it operates, irrespective of production levels.
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Interest on a bank loan (E): This is considered a fixed cost because the interest payment does not change with production levels; it's a predetermined financial obligation.