Q201
Depreciation on plant equipment, salaries of plant managers and plant leasing costs are considered a
A.
fixed batch cost
B.
variable batch cost
C.
variable overhead cost
D.
fixed overhead cost
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Depreciation on plant equipment, salaries of plant managers and plant leasing costs are considered a fixed overhead cost. Fixed overhead costs are costs that do not change even while the volume of production activity changes. Fixed costs are fairly predictable and fixed overhead costs are necessary to keep a company operating smoothly.