Which of the following describes fixed overhead costs?

Fixed overhead costs are defined as expenses that do not change with the level of production or activity within a relevant range. This means that irrespective of how much is produced, these costs will remain constant over a particular period. Common examples of fixed overhead costs include rent, salaries of permanent staff, and depreciation on equipment.

Understanding fixed overhead is crucial for management accounting as it impacts decision-making related to budgeting and cost control. Unlike variable costs, which fluctuate with production volume, fixed costs provide the business stability in terms of pricing and profit calculations over time.

In contrast, other options describe different cost behaviors. For instance, costs that vary directly with production levels are considered variable costs, which increase or decrease as production volume changes. Seasonal fluctuations refer to costs that might change due to market demand variations but are not fixed in nature. Finally, costs dependent on labor hours would typically relate to variable costs associated with production labor, not fixed overhead. Thus, the characterization of fixed overhead costs as those that remain unchanged, regardless of activity level, accurately reflects their nature in management accounting.