The following data pertain to activity and costs for two months:

Assuming that these activity levels are within the relevant range,what were the mixed costs for November?
A) $20,000.
B) $25,000.
C) $35,000.
D) $40,000.

Question

The following data pertain to activity and costs for two months:

Assuming that these activity levels are within the relevant range,what were the mixed costs for November?
A) $20,000. 
B) $25,000. 
C) $35,000. 
D) $40,000.

Quizplus · Accepted Answer

To calculate the mixed costs, we need to find the difference between the total cost at the highest level of activity and the variable costs at the same level. In this case, the highest level of activity is 8,000 machine hours in November, and the total cost at this level is $45,000. The variable cost at this level can be found by subtracting the fixed cost ($20,000) from the total cost, which is $25,000. Therefore, the mixed costs for November are $25,000.

The Following Data Pertain to Activity and Costs for Two