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CIPS L3M3 Exam - Topic 3 Question 25 Discussion

What is the name given to costs which do not vary as activity levels in a business increase or de-crease?
C) Direct costs
A) Variable costs
B) Indirect costs
D) Fixed costs

CIPS L3M3 Exam - Topic 3 Question 25 Discussion

Actual exam question for CIPS's L3M3 exam
Question #: 25
Topic #: 3
[All L3M3 Questions]

What is the name given to costs which do not vary as activity levels in a business increase or de-crease?

Show Suggested Answer Hide Answer
Suggested Answer: C

Political.

It's a close-run thing with economic, but the reference to 'stability of governing regimes' clinches if for 'political'.


by Jennifer at Oct 18, 2024, 01:42 PM

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Leota
9 months ago
Really? I always mix those up.
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Latia
9 months ago
Nope, fixed costs are the right answer!
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Albina
10 months ago
Wait, are you sure? I thought it was variable costs.
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Vilma
10 months ago
Agreed, fixed costs don’t change with activity levels.
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Devorah
10 months ago
It's definitely fixed costs!
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Colette
10 months ago
This question reminds me of a practice test where we discussed how fixed costs remain constant. I’m pretty confident it’s fixed costs.
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Lynelle
11 months ago
I’m a bit confused. I thought indirect costs were also fixed, but now I’m leaning towards option D.
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Bulah
11 months ago
I remember studying variable costs, but they fluctuate with activity. Fixed costs seem to fit better for this question.
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Dustin
11 months ago
I think the answer might be fixed costs, but I’m not entirely sure. It’s the one that doesn’t change with production levels, right?
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Omer
11 months ago
The key here is that the costs don't vary with changes in activity levels. That points to fixed costs as the answer. I feel pretty confident about this one.
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Joni
11 months ago
I'm a bit confused on the wording of the question. Can someone clarify what they mean by "activity levels" in a business? I want to make sure I'm interpreting that correctly.
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Mindy
11 months ago
Fixed costs, got it. This is a classic cost accounting question that we've covered a lot in class.
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Geraldine
11 months ago
Hmm, I'm a little unsure about this one. I know the difference between fixed and variable costs, but I want to double-check my understanding before answering.
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Genevive
11 months ago
This one seems pretty straightforward. I'm pretty sure the answer is fixed costs.
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Launa
1 year ago
D) Fixed costs is the way to go. I'm not going to let these tricky accounting terms trip me up. Bring on the next question!
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Wilson
1 year ago
Yes, fixed costs are like rent or salaries that stay the same no matter how much we produce.
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Krissy
1 year ago
I agree, fixed costs are costs that remain constant regardless of activity levels.
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Stefanie
1 year ago
Fixed costs is the way to go. I'm not going to let these tricky accounting terms trip me up. Bring on the next question!
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Ahmad
1 year ago
Haha, I bet the person who wrote this question is a real comedian. They must have been thinking, 'Let's see if they can figure out the difference between fixed and variable costs!' Well, I'm ready for the punchline - D) Fixed costs.
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Taryn
1 year ago
Good job!
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Jesus
1 year ago
I knew that one!
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Gearldine
1 year ago
That's correct!
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Markus
1 year ago
Fixed costs
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Long
1 year ago
But what about indirect costs? They also do not vary with activity levels.
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Marsha
1 year ago
Hmm, I was torn between B) Indirect costs and D) Fixed costs, but I think D) is the correct answer. Fixed costs, like rent and insurance, stay the same regardless of how much you produce.
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Hyun
1 year ago
Yes, fixed costs are expenses that do not change with the level of production.
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Val
1 year ago
I agree, fixed costs are the ones that stay the same no matter what.
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Wenona
1 year ago
I agree with Delisa, fixed costs do not vary with activity levels.
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Justa
1 year ago
The answer is clearly D) Fixed costs. These are the costs that don't change with the level of production or sales.
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Omer
1 year ago
Exactly, they stay the same whether you produce a lot or a little.
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Raul
1 year ago
So, fixed costs are like rent and salaries, right?
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Rasheeda
1 year ago
I agree, fixed costs remain constant regardless of activity levels.
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Antonette
1 year ago
I think the answer is D) Fixed costs.
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Delisa
1 year ago
D) Fixed costs
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