b. The major types of costs incurred by Home Depot that likely affected the decline in sales are fixed and variable costs. Fixed cost is consistent with the behavior of total costs, which are unaffected by change and when activity changes. These costs are steady regardless of whether units are produced (Edmonds, Tsay, & Olds, 2011) and while there are disadvantages to fixed costs, the major advantage is “as output increases, cost per unit decreases” (Edmonds, Tsay, & Olds, 2011, p. 57). Fixed cost is the leverage used to “achieve disproportionate changes in revenue and profitability” (Edmonds, Tsay, & Olds, 2011, p. 56). For instance, when sales change the amount of change in net income is directly influenced by the cost structure. “The