Fixed operating costs ________.

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BlackTom AI · Accepted Answer

To analyze the statement, we need to consider what fixed operating costs are and how they relate to cost classifications.
Option 1: 'include expenses like rent' — This is true because fixed operating costs commonly include items like rent, insurance, and depreciation, which do not vary with production volume.
Option 2: 'are not included in COGS' — This is generally accurate. COGS covers costs directly tied to producing goods (direct materials, direct labor, and often variable manufacturing overhead). Fixed operating costs are treated as period costs and are not part of COGS.
Option 3: 'are not direct costs of creating each product' — This is correct. Fixed operating costs are indirect and not traceable to a specific unit of production, so they are not direct costs.
Option 4: 'All of these.' — Since options 1, 2, and 3 are true, this compound statement is also true.
In summary, fixed operating costs encompass expenses like rent, typically do not appear in COGS, and are not direct costs of producing each product; therefore all of the statements are correct.

GBUS4330W01 25 Fall GBUS 4330 Quiz 2 - Requires Respondus LockDown Browser

Fixed operating costs ________.

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