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Sometimes referred to as cost of inventory on hand, the inventoriable cost will include not only the cost of purchasing the items that are found in the inventory, but also all expenses that are related to using those items in the creation of products that are ultimately offered for sale.
Fixed costs are all the costs that remain constant for a business regardless of production levels. Variable costs are all the costs for a business that vary depending on production levels. Fixed costs and variable costs are mutually exclusive, meaning that a cost cannot be both fixed and variable. There can, however, be fixed and variable components of a cost, as is the case with labor costs.