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Question
Costs like rent, insurance etc. which do not change inspite of changes in the volume of output are ______ costs.
Options
Direct
Indirect
Fixed
Variable
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Solution
Costs like rent, insurance etc. which do not change inspite of changes in the volume of output are fixed costs.
Explanation:
Rent and insurance are fixed costs because they are overheads that remain constant in total within a given time and activity range, regardless of output. They are indirect expenses by nature but are classified as fixed costs by behaviour.
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