In business accounting, which of the following is typically categorized as either fixed or variable?

• A. Outputs
• B. Inputs
• C. Revenues
• D. Liabilities

Answer: (B)

Costs show fixed or variable behavior as activity level changes. This distinction helps managers predict how expenses will move with production or sales. The thing that carries those costs is inputs—the resources used to produce goods or services. Some inputs incur fixed costs that don’t change with output, like factory rent or salaried management. Other inputs incur variable costs that vary with how much is produced, such as raw materials or hourly labor. Outputs, revenues, and liabilities aren’t described by fixed/variable cost behavior in the same way, so they aren’t categorized this way.