Question

Sonia opened a yoga studio where she teaches classes and sells yoga clothing. Fixed costs for Sonia's yoga studio include the cost of the

A.) Tank tops
B.) Wages paid to the other yoga instructors
C.) Lease on the studio space
D.) Insurance that the landlord requires Sonia to carry for the studio.

Answer 1

Answer:

C.) Lease on the studio space

D.) Insurance that the landlord requires Sonia to carry for the studio.

Explanation:

Fixed cost are costs that do not change with the level of output.

These costs are incurred whether or not people come to Sonia's studio.

Variable costs are costs that change with the level of output. If output rises, variable cost increases and falls if output reduces. In this question, the variable costs are the costs of tank tops and wages paid to the other yoga instructors.

I hope my answer helps you.