Fixed costs:
A)Are a constant percentage of sales revenues
B)Vary with the level of depreciation expense
C)Are constant with changes in the level of output
D)Are inversely related to the level of output

Question

Quizplus · Accepted Answer

Fixed costs are independent of the level of output and remain constant despite changes in production or sales. They include expenses such as rent, salaries, insurance, and property taxes. Option A is incorrect because fixed costs do not vary based on sales revenue. Option B is incorrect because fixed costs are not related to depreciation expense. Option D is incorrect because fixed costs are not inversely related to the level of output.

Fixed Costs