Select cost information for Seacrest Enterprises is as follows:
Based on this information:
A) Direct materials is a fixed cost and utilities expense is a mixed cost.
B) Utilities expense is a mixed cost and rent expense is a fixed cost.
C) Both direct materials and utilities expense are mixed costs.
D) Both direct materials and rent expense are variable costs.
E) Utilities expense is a mixed cost and rent expense is a variable cost.

Question

Select cost information for Seacrest Enterprises is as follows: 
Based on this information:
A) Direct materials is a fixed cost and utilities expense is a mixed cost. 
B) Utilities expense is a mixed cost and rent expense is a fixed cost. 
C) Both direct materials and utilities expense are mixed costs. 
D) Both direct materials and rent expense are variable costs. 
E) Utilities expense is a mixed cost and rent expense is a variable cost.

Quizplus · Accepted Answer

Based on the information given, utilities expense has a variable component (cost per unit varies with output) and a fixed component (total cost remains the same regardless of output), making it a mixed cost. Rent expense, on the other hand, remains constant at $14,000 regardless of output, making it a fixed cost. Therefore, choice B is the best answer.

Select Cost Information for Seacrest Enterprises Is as Follows