COST ACCOUNTING
COST BEHAVIORS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
variable cost element and a fixed cost element.
|
|
|
fixed cost element and a controllable cost element.
|
|
|
relevant cost element and a controllable cost element.
|
|
|
variable cost element and a relevant cost element.
|
Detailed explanation-1: -Mixed cost is the total cost that combines two types of costs, i.e., fixed costs and variable costs, and therefore implies that a part of this cost doesn’t change (fixed cost) with changes in production volume. However, the other part (variable cost) changes with the volume or quantity produced.
Detailed explanation-2: -Fixed costs remain the same no matter how many units you produce or sell. Variable costs are directly tied to your sales and production. They fluctuate as your output increases and decreases. Mixed costs are a combination of your fixed and variable costs.
Detailed explanation-3: -A mixed cost is one that contains both variable and fixed cost elements.
Detailed explanation-4: -Example of Mixed Costs The annual expense of operating an automobile is a mixed cost. Some of the expenses are fixed because they do not change in total as the number of annual miles change. These include insurance, parking fees, and some depreciation.