A mixed cost:
A)is fixed over a wider range of activity than a step cost.
B)is a fixed cost over the relevant range and a variable cost everywhere else.
C)contains both fixed and variable components.
D)always increases on a per unit basis.

Question

Quizplus · Accepted Answer

A mixed cost contains both fixed and variable components. This means that the cost will increase as the level of activity increases (variable component) but will also have a fixed portion that does not change regardless of the level of activity. It differs from a fixed cost in that a fixed cost would remain the same regardless of the level of activity, and it differs from a variable cost in that a variable cost changes proportionally with the level of activity, rather than having a fixed component.

A Mixed Cost