Which of the following best defines fixed costs in a business?

Fixed costs are best described as costs that remain constant regardless of customer volume. This means that fixed costs do not fluctuate based on the level of goods or services produced or sold. These costs typically include rent, salaries of permanent staff, and insurance, which are incurred regardless of how much business the company conducts in a given period.

Understanding fixed costs is crucial for businesses as they represent essential expenses that must be covered to maintain operations. This consistent nature allows businesses to predict their financial obligations and helps in budgeting and financial forecasting. In contrast, other types of costs fluctuate based on various factors; for instance, variable costs change with sales volume, and thus do not fit the definition of fixed costs.