Which of the following statements is correct?
All fixed costs are avoidable.
All fixed costs are unavoidable.
All variable costs are unavoidable.
None of the above are correct.



Answer :

Final answer:

Fixed costs remain constant regardless of production levels, while variable costs fluctuate with output. All fixed costs are unavoidable.


Explanation:

Fixed costs are those expenses that remain constant regardless of the amount of goods produced, such as rent for a factory. On the other hand, variable costs are directly tied to production levels. It is important to understand that all fixed costs are unavoidable as they do not change with the level of output.


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