Costs that do not vary with production or sales level are referred to as ________.
A) fixed costs
B) variable costs
C) target costs
D) total costs
E) unit costs

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with production or sales level, such as rent, salaries, and insurance premiums. Variable costs, on the other hand, are costs that vary with production or sales level, such as raw materials and utilities. Target costs are costs that a company aims to achieve for a particular product or service, and unit costs refer to the cost of producing one unit of a product or service. Total costs are the sum of fixed and variable costs.

Costs That Do Not Vary with Production or Sales Level