Answer to Question #245048 in Marketing for Lindsey

Question

Choose a real or made up example of a company, and describe at least three fixed cost the company has

Answer 1

I would take coca cola Company as an example. The Coca-Cola Company is a total beverage company with products sold in more than 200 countries and territories. The company's purpose is to refresh the world and make a difference. Some examples of fixed cost that Coca Cola incur includes rent expenses for their bottling plants, salary for thousands of employees, the cost to upkeep their plants and equipment, insurance, and advertising expenses.

 Advertising is a big production cost for Coca Cola that does not change when output changes this is because companies will continue advertising their products whether output is low or high. The cost of advertising includes magazines ads, billboard signs, celebrity endorsements and commercials on TV’s and radio.

Rent expense is another example of fixed cost in the coca cola company. This is whether the business is experiencing losses or profits the company has the mandate to pay rents. Last but not the least is insurance. The insurance of the coca cola company does not change even when the company is experiencing a loss the company is responsible of paying for its insurance.