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Is it true that Fixed costs are known by many names such as fixed overheads / fixed production cost / fixed overhead expenditure / other fixed costs / will stay the same in all the budgeting approaches whether it would flexed budget; rolling budget; incremental budget calculations.
[ We do not have to change it whatever the case would be! ]
Is that true sir?
Fixed costs are costs where the total does not change due to changes in the level of activity.
They may occur for different reasons – fixed production costs occur during production whereas other fixed costs occur for other reasons (such as fixed selling costs).
When budgeting we assume that the fixed costs remain unchanged in total unless the question specifies otherwise. (They will not change due to the level of activity, but obviously they might change because costs may increase due to inflation etc..)
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