Final answer:
Companies with large fixed manufacturing overhead costs have total manufacturing overhead costs that remain fairly constant regardless of production levels. The correct answer to the question is option b. remain fairly constant.
Step-by-step explanation:
When companies have large amounts of fixed manufacturing overhead, total manufacturing overhead costs tend to remain fairly constant from one period to the next. Fixed costs are expenditures that do not change regardless of the level of production.
Examples include the rent on a factory or a retail space, cost of machinery or equipment, research and development costs, and even expenses like advertising to popularize a brand name. While the proportion of fixed to variable costs can vary significantly across different industries, within a company with sizable fixed manufacturing overhead, these costs do not fluctuate much with changes in production volume.
The correct option here is b. remain fairly constant. Fixed costs, such as manufacturing overhead, remain unchanged even when production levels vary, thus providing stability to the overall manufacturing overhead costs. In contrast, variable costs would change in proportion with production volume.