Chips Co., maker of computers, incurred the following cost during the year. Is thefollowing cost item a fixed or variable cost?Boxes used to package the completed computersVariableFixed Chips Co., maker of computers, incurred the following cost during the year. Is thefollowing cost item a fixed or variable cost?Utility bill for the factoryVariableFixed

Answered: Chips Co., maker of computers, incurred…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Chips Co., maker of computers, incurred the following cost during the year. Is the
following cost item a fixed or variable cost?
Boxes used to package the completed computers
Variable
Fixed

Chips Co., maker of computers, incurred the following cost during the year. Is the
following cost item a fixed or variable cost?
Utility bill for the factory
Variable
Fixed

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The term "fixed cost" refers to a cost that remains constant regardless of the number of goods or services produced or sold. Fixed costs are expenses that a business must pay regardless of its specific business activities. This means that fixed costs are typically indirect, in the context that they do not apply to a company's production of goods or services. Companies usually have two types of costs: fixed costs and variable costs, which combine to form total costs.

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