Which expense is a fixed cost for a small office?

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Multiple Choice

Which expense is a fixed cost for a small office?

Explanation:
Fixed costs stay the same each period regardless of how busy the office is. The property lease is a regular, predictable payment that doesn’t change with the amount of work or number of hours used, so it’s a fixed cost. In contrast, the water bill varies with usage, an hourly administrative assistant’s pay changes with hours worked, and paper supplies vary with how much is used. So the office lease best fits the idea of a fixed cost.

Fixed costs stay the same each period regardless of how busy the office is. The property lease is a regular, predictable payment that doesn’t change with the amount of work or number of hours used, so it’s a fixed cost. In contrast, the water bill varies with usage, an hourly administrative assistant’s pay changes with hours worked, and paper supplies vary with how much is used. So the office lease best fits the idea of a fixed cost.

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