Costs which do not vary according to output?

• A. Variable Costs
• B. Fixed Costs
• C. Breakeven Point
• D. Total Costs

Answer: (B)

Fixed costs are costs that do not vary with output. They stay constant no matter how much is produced, such as rent for the premises or the salaries of permanent staff. Because these expenses don’t change with production levels, they form the fixed part of a business’s costs.

In contrast, variable costs change as output changes (materials, direct labour paid per unit, utilities used in production). Total costs equal fixed costs plus variable costs, so as you produce more, total costs rise because the variable portion increases.

The breakeven point isn’t a cost type—it’s the level of output where total costs equal total revenue. And total costs do vary with output overall since the variable portion changes with production.