Three different divisions of a toy 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
Employees Cost A Cost B Cost C
0 $ 0 $120 $118
25 50 118 180
50 100 123 245
75 125 124 296
100 200 119 360
Which cost is best described as mixed?
A)Cost A
B)Cost B
C)Cost C
D)Cost B and Cost C

Question

Quizplus · Accepted Answer

Cost C is best described as mixed because it has both fixed and variable components. The fixed portion of the cost is $118 for any level of employment, while the variable portion increases with the number of employees. Cost A and Cost B are either solely fixed or solely variable in nature.

Three Different Divisions of a Toy Manufacturing Company Are Estimating