Are wages a fixed cost?
Understand the Problem
The question is asking whether wages, which are payments made to employees for their work, are considered a fixed cost in economic terms. A fixed cost is an expense that does not change with the level of goods or services produced during a certain period. The question seeks to clarify the classification of wages in financial analysis.
Answer
Wages can be both fixed and variable costs.
The final answer is wages can be both fixed and variable costs.
Answer for screen readers
The final answer is wages can be both fixed and variable costs.
More Information
Employee salaries that are not based on the number of hours worked are typically fixed costs. However, hourly wages and overtime, which can vary based on hours worked and other factors, are considered variable costs.
Sources
- What Is Fixed Cost? - LegalZoom - legalzoom.com
- Do Minimum Wage Laws Make Labor a Fixed or Variable Cost? - investopedia.com
- Fixed vs. Variable Costs: What's the Difference in Business? - patriotsoftware.com
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