Which of the following costs typically include both fixed and variable components?
A) Direct materials
B) Direct labor
C) Factory overhead
D) None of these

Question

Quizplus · Accepted Answer

Factory overhead costs typically include both fixed and variable components. Fixed costs include items such as rent, property taxes, and salaries, which do not change with changes in production levels. Variable costs, on the other hand, include items such as utilities and materials, which do vary with production levels. Therefore, factory overhead costs are a combination of fixed and variable costs. Direct materials and direct labor are typically considered variable costs, while none of these is not a valid choice.

Which of the Following Costs Typically Include Both Fixed and Variable