Question

Which of the following is incorrect for fixed cost?

Options

• Fixed costs are time-based.

• Fixed costs are controllable in the short run.

• Fixed costs are fixed in total but vary per unit.

• Example of Fixed cost : Rent, insurance, salary.

Answer 1

Fixed costs are controllable in the short run.

Explanation:

Fixed costs are not controllable in the short run because they’re time‑based and remain constant in total within a relevant activity range (though per‑unit cost falls as output rises). Examples: rent, insurance, salaries.