Based on the following cost data, what conclusions can you make about the costs of Product A and Product B?
A) The cost of Product A is a fixed cost and the cost of Product B is a variable cost.
B) The cost of Product A is a variable cost and the cost of Product B is a fixed cost.
C) The costs of Product A and Product B are both variable costs.
D) The costs of Product A and Product B are both mixed costs.

Question

Based on the following cost data, what conclusions can you make about the costs of Product A and Product B? 
A) The cost of Product A is a fixed cost and the cost of Product B is a variable cost. 
B) The cost of Product A is a variable cost and the cost of Product B is a fixed cost. 
C) The costs of Product A and Product B are both variable costs. 
D) The costs of Product A and Product B are both mixed costs.

Quizplus · Accepted Answer

When the volume increases, the total cost of Product A increases; as such, the cost of Product A is a variable cost. The fixed cost per unit of Product B decreases when volume increases; as such, the cost of Product B is a fixed cost.

Based on the Following Cost Data, What Conclusions Can You