A mixed cost
A) remains constant when the output level increases.
B) cannot be separated.
C) contains both a fixed and variable component.
D) All of these are correct.

Question

Quizplus · Accepted Answer

A mixed cost contains both a fixed and variable component, meaning there is a portion of the cost that remains constant regardless of output level and a portion that varies based on output level. Option A is incorrect because a mixed cost does not remain constant with increases in output level. Option B is also incorrect because a mixed cost can be separated into its fixed and variable components using various methods, such as the high-low method or regression analysis. Therefore, option C is the best choice.

A Mixed Cost