A car lease payment computed by the number of miles driven can be identified as a:
A) discretionary fixed cost
B) mixed cost
C) purely variable cost
D) committed fixed cost

Question

Quizplus · Accepted Answer

A purely variable cost is a cost that changes in direct proportion to the level of activity. In this case, the car lease payment is computed by the number of miles driven, so it is a purely variable cost.

A Car Lease Payment Computed by the Number of Miles