Question

Within the relevant range, which of the following costs remains the same irrespective of the changes in production?

A) total mixed costs
B) total operating costs
C) total variable costs
D) total fixed costs

Answer 1

Total fixed costs remain unchanged within the relevant range, irrespective of production quantity, unlike variable or mixed costs which vary with the level of production.

Step-by-step explanation:

The question asked which type of cost remains the same regardless of changes in production levels within the relevant range. Total fixed costs remain unchanged within the relevant range, irrespective of the production quantity. This is because fixed costs are not related to the level of goods or services produced by the business. Variable costs, on the other hand, vary directly with the level of production. Mixed costs contain both variable and fixed cost components, and thus part of them changes with production level. Finally, total operating costs may change as they typically consist of both variable and fixed costs. Therefore, the correct answer is that total fixed costs do not change with production levels within the relevant range.