Three different divisions of a university are estimating costs for their human resources departments. Each division has a cost structure that is different from the other divisions and those structures are represented by the following cost behaviour patterns.
$\begin{array}{c}
\begin{array}{c}
\text {Number of}\
\underline{\text {Employees}}\
0 \
25\
50\
75\
100
\end{array}
\begin{array}{c}
\
\underline{\text { Cost A }} \
\$ 0 \
50 \
100 \
125 \
200
\end{array}
\begin{array}{c}
\
\underline{\text { Cost B} } \
\$ 120 \
118 \
123 \
124 \
119
\end{array}

\begin{array}{c}
\
\underline{\text { Cost C} } \
\$ 118 \
180 \
245 \
296\
360
\end{array}

\end{array}$

Which cost is best described as mixed?
A) Cost A
B) Cost B
C) Cost C
D) Cost B and Cost C

Question

Three different divisions of a university are estimating costs for their human resources departments. Each division has a cost structure that is different from the other divisions and those structures are represented by the following cost behaviour patterns.
 $\begin{array}{c}
\begin{array}{c}
\text {Number of}\
\underline{\text {Employees}}\
0 \
25\
 50\
 75\
 100
\end{array}
\begin{array}{c}
\
\underline{\text { Cost A }} \
 \$ 0 \
50 \
100 \
125 \
200
\end{array}
\begin{array}{c}
\
\underline{\text { Cost B} } \
\$ 120 \
118 \
123 \
124 \
119
\end{array}

\begin{array}{c}
\
\underline{\text { Cost C} } \
\$ 118 \
180 \
245 \
296\
360 
\end{array}

\end{array}$

Which cost is best described as mixed?
A) Cost A
B) Cost B
C) Cost C
D) Cost B and Cost C

Quizplus · Accepted Answer

Cost C is best described as mixed because it has both fixed and variable components. The fixed component is the $118, which is incurred regardless of the number of employees. The variable component is the $6 per employee, which increases as the number of employees increases.

Three Different Divisions of a University Are Estimating Costs for Their