Which term refers to costs that do not change with output?

Which term refers to costs that do not change with output?

• A. Variable Costs
• B. Semi-variable Costs
• C. Fixed Costs
• D. Overheads

Answer: (C)

Costs that do not change with output are fixed costs. They stay the same no matter how much is produced, within a normal level of activity. This includes things like rent or salaries that must be paid regardless of production volume. In contrast, variable costs increase as production rises (like raw materials per unit), and semi-variable costs have both fixed and variable elements. Overheads are indirect costs and can be fixed or variable, but the specific idea of costs that stay constant with output points to fixed costs.

Costs that do not change with output are fixed costs. They stay the same no matter how much is produced, within a normal level of activity. This includes things like rent or salaries that must be paid regardless of production volume. In contrast, variable costs increase as production rises (like raw materials per unit), and semi-variable costs have both fixed and variable elements. Overheads are indirect costs and can be fixed or variable, but the specific idea of costs that stay constant with output points to fixed costs.