Which of the following is an example of a fixed cost?

A fixed cost is an expense that does not change with the level of production or sales within a certain range. It remains constant regardless of the volume of goods or services produced. Rent for office space is a classic example of a fixed cost because it is a consistent and predictable expense that a business incurs each month, irrespective of how much the business sells or produces.

In contrast, raw materials, utilities based on usage, and sales commissions involve variable costs that fluctuate based on production levels or sales activity. Raw materials costs adjust with the amount of product being produced; utilities often rise or fall depending on usage; and sales commissions are directly tied to the sales made, making them variable costs as well.