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Horngren'S Financial And Managerial Accounting
Found in: Page 1119

Short Answer

What is a fixed cost? Give an example.

Fixed costs are the costs that persistent consistency in total amount.

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Step by Step Solution

Meaning of Fixed cost

The cost that is not function of any other variable is called fixed costs, therefore this cost show persistent consistency even after change in volume of production.

Examples of Fixed cost

  1. Minimum electricity bill
  2. Building or machinery rent
  3. Salaries to employees

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