Which term describes costs that are independent of the order size?

The term that accurately describes costs that remain constant regardless of the order size is best represented by incremental fixed cost per order. These costs do not fluctuate with the number of units ordered or produced; instead, they are incurred each time an order is placed, independent of the scale of production or the quantity ordered.

Incremental fixed costs can include expenses like setup costs or administrative fees that must be covered regardless of whether you're producing a small batch or a large one. This concept is crucial for businesses to understand, as it helps in budgeting and financial planning, especially in determining the most cost-effective order quantities and inventory levels.

The other terms do not correctly represent this concept. Variable costs, for instance, change in proportion to the order size; average costs can fluctuate based on the total cost divided by the number of units, which also varies with order size; while marginal cost refers to the cost added by producing one additional unit, which again is influenced by the order size. Therefore, incremental fixed cost per order is the appropriate term for costs that are independent of the order size.