Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 8

Are all fixed costs indirect? Explain.

Step 1 of 3

A manufacturer incurs several cost during the production process. These costs are bifurcated into direct and indirect cost and further into fixed costs and variable costs.

Fixed Costs:

Fixed costs do not change with the level of output. And remain fixed for a particular period of time. Fixed costs are incurred even if no unit is produced during the given period of time.