Zodiac Company's total costs are the same at all levels of activity. The company's cost structure must have all:

Question

Quizplus · Accepted Answer

If Zodiac Company's total costs remain the same regardless of the level of activity, it must have only fixed costs. Variable costs vary with the level of activity, so they would not result in a consistent total cost. Product costs include both direct materials and manufacturing overhead, whereas fixed costs are not directly related to production costs. Sunk costs are costs that have already been incurred and cannot be recovered, and they are not relevant to the company's current cost structure.

Zodiac Company's Total Costs Are the Same at All Levels