Fixed costs:
A)may include either direct or indirect costs.
B)vary with production or sales volumes.
C)can be adjusted in the short run to meet actual demands.
D)include parts and materials used to manufacture a product.

Question

Quizplus · Accepted Answer

Fixed costs can be either direct costs (such as salaries for employees) or indirect costs (such as rent for a building).

Answer: B 
 Fixed costs do not vary with production or sales volumes. They remain constant regardless of how much is produced or sold.

Answer: C 
 Fixed costs cannot be adjusted in the short run to meet actual demands. They are predetermined and do not change with fluctuations in demand.

Answer: D 
 Parts and materials used to manufacture a product are considered variable costs, not fixed costs. Fixed costs are typically associated with overhead expenses.

Fixed Costs