Question

Last summer, to earn money for their college tuition, George and Tom operated a food kiosk at Clearwater Beach, Florida for 3 months. They sold soft drinks, chips, crackers, and candy bars. A month before they were planning to open, Larry found a location that rented for $500 a month and a small refrigerator unit which they rented for $60 per month. Alan found distributors for the food products as well as for the paper products that they would need. Alan also purchased a business license for $80 and bought 3-month's worth of liability insurance for $100. The cups, straws, napkins, and extra sales people needed to staff the stand are all examples of:Marginal costs.Break even points.Variable costs.Fixed costsAverage costs.

Answer 1

Answer: Fixed Costs

Explanation: Fixed Costs are cost incurred by an organisation during the cause of business.

They are fixed in nature which means they are incurred in as much as the business is operational. They are costs that must be incurred on the business and they include salaries and wages, cost of consumables, rent, rate etc.

Fixed costs are constant when calculating the profit or loss of a business.