Which item is NOT typically classified as a Fixed Cost?

Which item is NOT typically classified as a Fixed Cost?

• A. Fuel
• B. Hangar
• C. Insurance
• D. Maintenance

Answer: (A)

Fixed costs stay the same no matter how much you fly, while variable costs change with activity. Fuel is the classic variable cost because the amount you burn depends directly on flight hours and distance. Hangar rental is paid regardless of flight activity, making it a fixed overhead. Insurance is a regular premium paid over a set period, also fixed. Maintenance tends to be budgeted as a steady overhead in many operations, with additional repairs adding variable costs, so it’s treated as fixed for planning purposes. Since fuel varies with usage, it is the item not classified as a fixed cost.

Fixed costs stay the same no matter how much you fly, while variable costs change with activity. Fuel is the classic variable cost because the amount you burn depends directly on flight hours and distance. Hangar rental is paid regardless of flight activity, making it a fixed overhead. Insurance is a regular premium paid over a set period, also fixed. Maintenance tends to be budgeted as a steady overhead in many operations, with additional repairs adding variable costs, so it’s treated as fixed for planning purposes. Since fuel varies with usage, it is the item not classified as a fixed cost.