Capacity costs are certain __________ costs that provide a firm with the capacity to produce or sell or both.
A)fixed
B)variable
C)discretionary costs
D)opportunity costs

Question

Quizplus · Accepted Answer

Capacity costs are fixed costs because they do not vary with changes in production or sales levels. These costs are incurred to provide a firm with the ability to produce or sell, such as the cost of machinery, rent, and salaries of permanent employees.

Capacity Costs Are Certain __________ Costs That Provide a Firm