Which of the following best describes fixed costs?

Fixed costs are those expenses that do not change with the level of production or sales activity within a certain range. They remain constant regardless of how much or how little is produced. Examples of fixed costs include rent, salaries of permanent staff, and depreciation on equipment. These costs must be paid regardless of the company’s output, which is why they are termed "fixed."

In contrast, the other choices imply variability in costs or limit the context of incurred expenses. For example, costs that fluctuate with production levels represent variable costs, which increase as production increases and decrease when production declines. Similarly, costs that are variable in nature also indicate that they change with output. Lastly, costs incurred only at the time of a sale suggest a direct relationship to revenue generation, which does not apply to fixed costs since they exist independently of sales or production levels. Thus, option B accurately encapsulates the definition of fixed costs.