Costs that do not vary with production levels or sales revenue are known as ________ costs.
A) overhead
B) variable
C) average
D) opportunity
E) total

Question

Quizplus · Accepted Answer

Overhead costs, also known as fixed costs, remain the same regardless of the level of production or sales revenue. Examples of overhead costs include rent, salaries of permanent employees, and utility bills. Option B, variable costs, vary with production levels, while option C, average costs, is a statistical concept that calculates the cost per unit. Option D, opportunity costs, refers to the value of the next best alternative foregone. Option E, total costs, is the sum of variable and fixed costs.

Costs That Do Not Vary with Production Levels or Sales