We typically think of labor as a variable cost even in the v

We typically think of labor as a variable cost, even in the very short run. However, some labor costs may be fixed. W A) An hourly employee B) A temporary worker who is paid by the hour C) A salaried manager who has a three-year employment contract D) none of the above 4. hich of the following items represents an example of a fixed labor cost?

Solution

Answer is C. A salaried manager who has a 3 year employment contract.

Explanation:

Generally, salaries paid to managerial personnel in the organisation is a fixed cost for the company as they are not directly related to the production or sale of the business. Their role is to look after the overall control and management of the business. Hence, salaries paid to these managers are treated as fixed cost.