Costs that are planned and are accrued during the operating period regardless of the level of production and sales are called _____ costs.
A)fixed
B)direct variable
C)average
D)marginal
E)future

Question

Quizplus · Accepted Answer

Fixed costs are those that do not vary with changes in the level of production or sales. They are planned and accrued during the operating period regardless of the level of activity. Examples of fixed costs include rent, salaries, and insurance premiums. Direct variable costs, on the other hand, are costs that vary directly with changes in the level of production or sales. Average costs and marginal costs are concepts related to cost behavior analysis and are not specific types of costs. Future costs are uncertain and cannot be planned or accrued until they occur.

Costs That Are Planned and Are Accrued During the Operating