Brock Morton has a fast-food franchise and must pay a franchise fee of $45,000 plus 4% of gross sales. In terms of cost behavior, the fee is known as a:

Name: Brock Morton has a fast-food franchise and must pay a franchise fee of $45,000 plus 4% of gross sales. In terms of cost behavior, the fee is known as a:
Brand: Quizplus
Rating: 4.9 (42 reviews)

Question

Quizplus · Accepted Answer

The franchise fee consists of a fixed component ($45,000) and a variable component (4% of gross sales), making it a semivariable cost because it contains both fixed and variable elements.

Brock Morton Has a Fast-Food Franchise and Must Pay a Franchise