Which statement is true?

A) Fixed costs and variable costs vary with output.
B) Neither fixed costs nor variable costs vary with output.
C) Only fixed cost varies with output.
D) Only variable cost varies with output.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Expenses that change in proportion to the activity or production level of a business.

Output

The total amount of goods or services produced by a company or economy in a given period.