Which of the following costs is a mixed cost?
A) salary of a factory supervisor
B) electricity costs of $3 per kilowatt-hour
C) rental costs of $10,000 per month plus $0.30 per machine hour of use
D) straight-line depreciation on factory equipment

Question

Quizplus · Accepted Answer

Rental costs are fixed costs because they remain constant regardless of the level of activity. On the other hand, the additional cost per machine hour is a variable cost because it varies with the level of activity. Therefore, the rental cost in this scenario is a mixed cost.

Which of the Following Costs Is a Mixed Cost