Allied & ICAR Exam Bank • ALLIED_0234 MCQ • 1 Mark

Section 2: Farm Machinery

Farm Machinery

Subtopic: Cost analysis of implements and tractors

Question Statement:

In agricultural machinery cost economics, which of the following is classified as a FIXED (overhead) cost?

Options:

  • (A) Annual interest on investment, taxes, housing, and insurance
  • (B) Diesel fuel consumed per hour
  • (C) Lubricating oil and filter changes
  • (D) Operator wages per hour

Answer Key:

A

Step-by-Step Solution & Explanation

Fixed costs occur regardless of machine use hours: depreciation, interest on investment, housing, taxes, and insurance.
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