What is classified as a fixed cost in a palay buy-and-sell operation accumulating costs at Php 5,000,000 for buying palay?

In the context of a palay buy-and-sell operation, fixed costs are those expenses that do not change with the volume of business activity; they remain constant regardless of the amount of palay bought or sold. Payment for loans represents a fixed cost because these payments need to be made based on the terms of the loan agreements, regardless of how much palay is traded.

In contrast, the cost of buying palay is a variable cost since it fluctuates directly with the volume of purchases, which depends on how much palay is bought for sale. Salaries and other costs can sometimes include both fixed and variable components, but they can be treated as fixed costs in many cases if they are regular and stable. Training expenses are typically considered a fixed cost, but these can also vary based on the training schedule and number of employees trained. Therefore, the most clear-cut example of a fixed cost here is the payment for loans, as it remains constant based on the terms agreed upon, independent of operational fluctuations.