Which of the following describes fixed costs?

Fixed costs are expenses that do not change with the level of production or sales. This means that regardless of whether a company produces a high volume of goods or none at all, these costs remain the same. Examples of fixed costs include rent, salaries, and insurance premiums. These expenses are essential for the operation of a business but must be paid even when no production takes place, highlighting their nature as unavoidable financial obligations.

The concept of fixed costs is crucial for understanding financial planning and profitability, as they affect a company's break-even point. Proper management of fixed costs can help businesses maintain financial stability, especially during periods of low activity.