Which of the following are most likely to be fixed costs of an airline? Select TWO that apply.

Which of the following are most likely to be fixed costs of an airline? Select TWO that apply.
A . Purchase of aircraft
B . Catering services
C . Advertising and promotion
D . Flightcrew training
E . Fuel

View Answer

Answer: A,D

Explanation:

Fixed costs (FC) are costs that do not vary with volume. To an airline once aircraft are purchased, flight crews trained and departures scheduled, costs are disproportionately fixed.

Variable costs (VC) are those which vary with the amount produced. Fuel, catering services

and marketing are examples of variable.

LO 2, AC 2.1