A company's costs take two forms. ________ are costs that do not vary with production or sales revenue.
A) Fixed
B) Variable
C) Attributed
D) Adjusted
E) Determined

Question

Quizplus · Accepted Answer

Fixed costs are costs that remain constant regardless of the level of production or sales revenue. Examples of fixed costs include rent, salaries, property taxes, and insurance premiums. These costs must be paid even if the company produces or sells no goods or services. Variable costs, on the other hand, are costs that change with the level of production or sales revenue, such as raw material costs, labor costs, and commission fees.

A Company's Costs Take Two Forms