Which cost category encompasses ongoing expenses like repairs and depreciation?

The correct choice is fixed costs, which are ongoing expenses that do not fluctuate with production levels or business activity. Fixed costs typically include expenses such as rent, salaries, and depreciation of assets. These costs are incurred regardless of the production output, meaning that even if a company does not produce any goods, it still has to pay for these expenses.

In the context of repairs and depreciation, repairs often fall under ongoing maintenance to keep assets operational, while depreciation is a systematic allocation of the cost of a tangible asset over its useful life. Both of these costs continue year-to-year and contribute to the financial obligations of a business, demonstrating the nature of fixed costs as essential expenditures that must be managed even in quieter business periods. This differentiates them from variable costs, which change based on levels of production; direct costs, which are directly attributable to a specific product or service; and indirect costs, which are not directly tied to a specific cost object but are necessary for overall operations.