Fixed production costs are:
A)directly related to labor costs.
B)measured as costs per unit of time.
C)ignored in project analysis.
D)dependent on the amount of goods or services produced.
E)irrelevant when conducting sensitivity analysis.

Question

Quizplus · Accepted Answer

Fixed production costs are constant over a specific period of time, regardless of the level of output, and are thus measured as costs per unit of time (e.g., monthly rent, salaries of permanent staff). They do not vary with the level of production or services provided.

Fixed Production Costs Are