Southern Food Service operates six restaurants in the Atlanta area.The company pays rent of $20,000 per year for each shop.The managers of each shop are paid a salary of $4,200 per month and all other employees are paid on an hourly basis.Relative to the number of hours worked,total compensation cost for a particular shop is which kind of cost?

Question

Quizplus · Accepted Answer

Mixed cost is a cost that has both fixed and variable components. In this case, the rent is a fixed cost, while the salaries of the hourly employees are variable costs. The salaries of the managers are mixed costs, since they are fixed for each month but vary from month to month depending on the number of hours worked.

Southern Food Service Operates Six Restaurants in the Atlanta Area