Which of the following would be classified as a fixed cost for a T-shirt manufacturer?

Question

BlackTom AI · Accepted Answer

Fixed costs are expenses that remain constant in total regardless of the firm's level of output in the short run (examples: factory rent, insurance, straight-line depreciation, salaried management). Variable costs change in total as production rises or falls (examples: direct materials, hourly wages, energy usage tied to production).

1) Relevant knowledge points and concepts
- Fixed cost: total does not vary with output over the relevant range; per-unit fixed cost falls as output rises.
- Variable cost: total varies directly with output; per-unit variable cost is (typically) constant.
- Distinguish wording: a cost expressed per unit of usage (e.g., per kWh, hourly wage, per meter of cloth) signals a variable cost.

2) Step-by-step reasoning for each option
- Electricity costs of $0.038 per kilowatt-hour: This is charged per unit of electricity consumed. If production increases, electricity consumption rises, so total electricity cost rises proportionally. Therefore it is a variable cost.
- Hourly wages of sewing machine operators: Wages paid by the hour rise as more labor hours are needed when output increases. Total hourly wage cost varies with production, so it is a variable cost.
- Cotton and polyester cloth: These are direct materials used per T-shirt. Total material cost increases with the number of shirts produced (variable cost).

3) Illustrative calculations (intermediate steps)
- Electricity: assume 0.2 kWh per shirt. For 100 shirts: 100 × 0.2 = 20 kWh → cost = 20 × $0.038 = $0.76. For 200 shirts: 200 × 0.2 = 40 kWh → cost = 40 × $0.038 = $1.52. Total cost doubles when output doubles → variable.
- Hourly wages: assume 1 hour per 10 shirts at $10/hr. For 100 shirts = 10 hours → $100. For 200 shirts = 20 hours → $200. Variable.
- Cloth: assume $2 of cloth per shirt. For 100 shirts = $200. For 200 shirts = $400. Variable.

4) Why the correct answer is correct
None of the listed items are fixed in total: each is charged per unit of usage (per kWh, per hour, per shirt), so total cost varies with production. True fixed costs (not listed) would include rent, salaried managers, insurance, or depreciation.

5) Why the other options are incorrect (brief)
- Electricity per kWh: variable because usage rises with output.
- Hourly wages: variable because hours worked depend on output.
- Cotton/polyester cloth: variable because materials used grow with production.

6) Conclusion
Because each listed cost varies with production, the correct choice is "none of these choices," which matches the provided answer.

Which of the following would be classified as a fixed cost for a T-shirt manufacturer?单项选择题

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