Chapter 21, Problem 1E

To determine

Fixed Cost:

It is a type of cost which does not vary with variation in production. It cannot be avoided by organization with regard to level of production. It remains same in short term. It is also known as period cost.

Variable Cost:

Variable costs are volume related costs that is they get varied with change in level of production. It increases with increase in production level and decreases with decrease in production level.

To identify: Whether the given cost is fixed cost or variable cost.