APICS Certified Supply Chain Professional (CSCP) — Question 103

In the analysis of costs, fixed costs are those that are:

Answer options

• A. independent of the volume of output.
• B. dependent on the utilization of the asset.
• C. inversely proportionate to the volume of output.
• D. constant through the useful life of the asset.

Correct answer: A

Explanation

The correct answer is A, as fixed costs do not change with the level of production or output. Options B and C describe variable costs, which fluctuate based on output levels, while D, although partially true, does not encapsulate the definition of fixed costs as accurately as A.