Question Bank • QB_FM_148 MCQ • 1 Mark

Section 2: Farm Machinery

Farm Machinery

Subtopic: Cost analysis of implements and tractors

Question Statement:

In agricultural machinery economics, which of the following is categorized under FIXED costs?

Options:

  • (A) Fuel and lubricants
  • (B) Repair and maintenance
  • (C) Operator wages
  • (D) Shelter, insurance, and taxes

Answer Key:

D

Step-by-Step Solution & Explanation

Fixed costs occur regardless of whether the machine is operated and include depreciation, interest on investment, taxes, housing/shelter, and insurance (often remembered as DITI). Fuel, lubricants, repairs, and labor are variable (operating) costs.
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