Which of the following is typically a fixed cost for a business?

A fixed cost for a business is an expense that does not change with the level of production or sales. It remains constant over a period of time, regardless of how much a business produces or sells.

Insurance is a prime example of a fixed cost. Typically, businesses pay a set amount for insurance premiums based on their coverage terms, which does not vary with production levels or sales volume. This means that whether the business is operating at full capacity or has a reduced output, the insurance costs remain the same.

In contrast, other expenses like utilities can fluctuate based on usage; advertising may vary according to the strategy and promotion levels; and raw materials are directly tied to production volume, meaning costs rise and fall with the amount produced. Understanding the nature of fixed costs like insurance helps businesses in budgeting and financial planning, allowing them to manage their expenses more effectively over time.