A toymaker is launching a new toy this summer. The toy company incurs a variety
ID: 2514281 • Letter: A
Question
A toymaker is launching a new toy this summer. The toy company incurs a variety of different costs. The list below contains some of the fixed costs and variable costs that it incurs.
Indicate which of the costs below are fixed costs (check all that apply):
The software needed to design the toy
The plastic used to make the toys
The insurance taken on the toy production plant
The fee paid to a designer to design the look of the toy
The paint used to decorate the toys
The packaging materials used to box the individual toys
The cost of the machines used to manufacture the toys
The labor used to assemble each toy
The software needed to design the toy
The plastic used to make the toys
The insurance taken on the toy production plant
The fee paid to a designer to design the look of the toy
The paint used to decorate the toys
The packaging materials used to box the individual toys
The cost of the machines used to manufacture the toys
The labor used to assemble each toy
Explanation / Answer
The software needed to design the toy – It is a Fixed cost as it is incurred only once
The plastic used to make the toys – It is a variable cost as it will be used every time the product is manufactured
The insurance taken on the toy production plant - It is a Fixed cost as it is incurred on an annual basis
The fee paid to a designer to design the look of the toy - It is a Fixed cost as it is incurred only once
The paint used to decorate the toys - It is a variable cost as it will be used every time the product is manufactured
The packaging materials used to box the individual toys - It is a variable cost as it will be used every time the product is manufactured
The cost of the machines used to manufacture the toys - It is a Fixed cost as it is incurred only once
The labor used to assemble each toy - It is a variable cost as it will be used every time the product is manufactured
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