Fixed operating costs include all EXCEPT:

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BlackTom AI · Accepted Answer

When evaluating fixed operating costs, we look for costs that do not vary with the level of output in the relevant range. 
Option 1: Advertising. In many cost structures, advertising is treated as a fixed or semi-fixed expense that the business incurs regardless of small production changes, especially if campaigns run for a period of time. It is not tied directly to units produced.
Option 2: Depreciation. Depreciation is a classic fixed cost because it does not change with the amount of production in the short term; the expense is determined by asset cost, useful life, and depreciation method, not by output level.
Option 3: Ingredients. Ingredients are typically a variable cost because their total expense rises with the quantity of goods produced. More units require more raw materials, so this cost moves with output rather than staying constant.
Option 4: Utilities. Utilities can be mixed, with a fixed component (base service charge) and a variable component (usage that depends on production volume). Depending on how the utility bill is structured, it may behave partly as fixed and partly as variable, but it is commonly treated as variable or mixed rather than purely fixed.

Given the above, the item that does not belong as a fixed operating cost (i.e., the one that is not fixed) is the variable-cost item: ingredients. The others are typically fixed (or at least not directly tied to production quantity in the short term), whereas ingredients increase with production and are therefore excluded from fixed costs.

GBUS4330W01 25 Fall GBUS 4330 Final Exam - Requires Respondus LockDown Browser

Fixed operating costs include all EXCEPT:

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