Why are fixed costs also called capacity$$ costs?

Question content area bottom

Part $1$

A$.$

Because the levels of these fixed costs are determined by$$ management's strategic decisions about the$$ organization's expected levels of activities or capacity.

Your answer is correct.

B$.$

These fixed costs cannot be identified to a given cost object in an economically feasible$$ way, thus they are applied to the$$ organization's capacity costs.

C$.$

These fixed costs are the result of producing more additional units than anticipated.

D$.$

Because it is the necessary cost of an activity that cannot be eliminated without affecting a$$ product's value to the customer.