In the mixed-cost function, Y = F + VX, the V stands for
A) total fixed cost.
B) total cost.
C) variable cost per unit of cost driver.
D) number of units of the cost driver.

Question

Quizplus · Accepted Answer

In the mixed-cost function, the variable cost per unit of the cost driver is represented by the V. This means that for every unit of the cost driver, the variable cost increases by V. Therefore, C is the correct choice. Option A is incorrect as the total fixed cost is represented by the F. Option B is incorrect as Y represents the total cost, not just the V. Option D is also incorrect as the number of units of the cost driver is not represented by V, but by X.

In the Mixed-Cost Function, Y = F + VX, the V