Three different divisions of a footwear manufacturing company 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 (A, B, and C).
Number of $\begin{array}{lrrr}\text { Emplovees } & \text { Cost A } & \text { Cost B } & \text { Cost } \mathrm{C}\\hline
0 & \$ 0 & \$ 120 & \$ 118 \
25 & 50 & 118 & 180 \
50 & 100 & 123 & 245 \
75 & 125 & 124 & 296 \
100 & 200 & 119 & 360
\end{array}$
Which cost is best described as fixed?
A) Cost A
B) Cost B
C) Cost C
D) Cost B and Cost C

Question

Quizplus · Accepted Answer

Cost B is best described as fixed because it remains relatively constant regardless of the number of employees, indicating that it does not vary with the level of production or the number of employees.

Three Different Divisions of a Footwear Manufacturing Company Are Estimating