Two different costs incurred by Ruiz Company exhibit the following behavior pattern per unit: Cost #1 and Cost #2 exhibit which of the following cost behavior patterns, respectively?
A) Fixed and variable
B) Variable and variable
C) Fixed and fixed
D) Variable and fixed

Question

Two different costs incurred by Ruiz Company exhibit the following behavior pattern per unit:  Cost #1 and Cost #2 exhibit which of the following cost behavior patterns, respectively?
A) Fixed and variable 
B) Variable and variable 
C) Fixed and fixed 
D) Variable and fixed

Quizplus · Accepted Answer

The cost per unit of Cost #1 decreases when volume increases; as such, Cost #1 is a fixed cost. When the volume increases, the cost per unit of Cost #2 stays the same; as such, Cost #2 is a variable cost.

Two Different Costs Incurred by Ruiz Company Exhibit the Following