Pivot Point Business 103 Practice Test

Fixed costs are expenses that don’t change with how many clients you serve. Salaries fit this because they’re typically paid on a set schedule regardless of the salon’s volume. Payroll remains the same week to week, even if business slows or peaks, so it doesn’t move with the number of services performed. In contrast, product purchases vary with volume: more clients mean more products used, so those costs go up as you do more services. Commissions also vary with sales performance, tying directly to how much you sell. Rent is generally fixed too, but this question highlights salaries as the fixed-cost example, illustrating how payroll can stay constant while other costs track with activity.