With mixed costs,the fixed cost element is viewed as the ________ and the variable cost element is viewed as the ________.
A) step cost; cost of capacity
B) cost of capacity; incremental cost of using capacity
C) variable cost; cost of capacity
D) step cost; mixed cost

Question

Quizplus · Accepted Answer

Mixed costs are costs that have both a fixed and variable component. In this case, the fixed cost element is the cost of capacity because it is a cost that is incurred regardless of how much of the variable cost element is used. The variable cost element is the incremental cost of using capacity because it only increases as more of the variable cost element is used. The other choices are not accurate.

With Mixed Costs,the Fixed Cost Element Is Viewed as the ________