Which of the following would be considered as a fixed cost?

A fixed cost is an expense that does not change with the level of production or sales within a certain range of activity. These costs remain constant regardless of the output level, making them predictable and manageable in the budgeting process.

The monthly rent payment is classified as a fixed cost because it remains the same regardless of how many units are produced or sold. Whether a business generates a lot of revenue or very little, the obligation to pay the monthly rent does not fluctuate. This stability allows businesses to better forecast their monthly expenses and manage cash flows.

In contrast, other expenses mentioned, like the cost of raw materials and utilities based on usage, vary with production levels. The cost of raw materials increases as more products are made, while utility costs can rise or fall depending on how much is used, making them variable expenses. Likewise, hourly wages can fluctuate based on the number of hours worked, contributing to their classification as variable costs.