Business Studies Multiple Choice Question – 30 June 2021

Lucy Jewels Ltd is a family-owned jewellery business, has 15 stores and 250 employees in the UK. 

Which of the following is an example of a fixed cost for Lucy Jewels Ltd?

Select ONE answer:

1. Store rents
2. Delivery costs
3. Stock purchases
4. Packaging costs

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct ==> Definition of fixed costs: costs that do not vary with output.  Lucy Jewels Its has 15 stores which will pay an annual rent.  Rent must be paid regularly, whether or not any sales are made therefore this is a fixed cost.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.