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

Question

Quizplus · Accepted Answer

Overhead costs are fixed costs that remain the same regardless of production levels or sales revenue. This includes expenses such as rent, salaries, and utilities. Variable costs, on the other hand, change or vary depending on the level of production or sales volume, such as raw materials or labor costs. Average costs are the total cost per unit of production or sales, while opportunity costs are the value of the next best alternative foregone when making a decision. Total costs refer to the total expenses incurred by a business, including both fixed and variable costs.

Costs That Do Not Vary with Production Levels or Sales