Inventory costs which are independent of the output quantity are called?

Inventory costs which are independent of the output quantity are called?

• A. Indirect Costs
• B. Variable Costs
• C. Fixed Costs
• D. Carrying Costs

Answer: (C)

Fixed costs are costs that do not change with the level of production or output. In inventory terms, they stay the same regardless of how much you produce or how much inventory you hold—think of things like warehouse rent, certain salaried management, or insurance. These contrasts with variable costs, which rise or fall directly with output (like raw materials or piece-rate labor). Carrying costs, by contrast, depend on how much inventory you keep and for how long, so they aren’t independent of quantity. Indirect costs cover overhead that supports production but aren’t defined by independence from output. So the term that fits inventory costs that don’t vary with output is fixed costs.

Fixed costs are costs that do not change with the level of production or output. In inventory terms, they stay the same regardless of how much you produce or how much inventory you hold—think of things like warehouse rent, certain salaried management, or insurance. These contrasts with variable costs, which rise or fall directly with output (like raw materials or piece-rate labor). Carrying costs, by contrast, depend on how much inventory you keep and for how long, so they aren’t independent of quantity. Indirect costs cover overhead that supports production but aren’t defined by independence from output. So the term that fits inventory costs that don’t vary with output is fixed costs.