[amp_mcq option1=”standing charges” option2=”variable charges” option3=”fixed charges” option4=”None of these” correct=”option1″]
The correct answer is: A. standing charges
Standing charges are fixed costs that are incurred regardless of the level of activity. They are also known as fixed overheads or indirect costs. Examples of standing charges include rent, insurance, and depreciation.
Variable charges are costs that vary in direct proportion to the level of activity. They are also known as direct costs or variable overheads. Examples of variable charges include the cost of materials and the cost of labor.
Fixed charges are not the same as variable charges. Fixed charges are incurred regardless of the level of activity, while variable charges vary in direct proportion to the level of activity.
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