The two types of cost used to determine total costs are __________ and __________.
A) minimum; maximum
B) direct; indirect
C) fixed; variable
D) hard; soft

Question

Quizplus · Accepted Answer

Fixed costs are those that remain constant regardless of the level of production or sales, such as rent or salaries. Variable costs, in contrast, are those that vary directly with the level of production or sales, such as the cost of raw materials or hourly labor costs. These two types of costs are used to determine total costs and are important in determining profitability and setting prices. Hence, C is the best choice.

The Two Types of Cost Used to Determine Total Costs