Figure 3-6.Taran Company incurred the following costs for the months of January and February.
-Refer to Figure 3-6. From the information above we can assume that
A) insurance and depreciation are fixed costs.
B) output decreased from January to February.
C) output stayed the same from January to February.
D) insurance is a mixed cost.

Question

Figure 3-6.Taran Company incurred the following costs for the months of January and February. 
-Refer to Figure 3-6. From the information above we can assume that
A) insurance and depreciation are fixed costs. 
B) output decreased from January to February. 
C) output stayed the same from January to February. 
D) insurance is a mixed cost.

Quizplus · Accepted Answer

Insurance and depreciation costs are typically considered fixed costs since they do not vary with changes in output levels. The information provided does not give any indication of changes in output levels, so we cannot make any assumptions about changes in output from month to month. There is no information provided about other costs being variable or mixed, so we cannot assume anything about them.