A company rents a machine to be used in operations.The rental agreement calls for a flat rent payment of $2,000 per month plus $0.10 for each hour the machine is used.This is an example of a ________.
A)fixed cost
B)variable cost
C)mixed cost
D)step cost

Question

Quizplus · Accepted Answer

This is an example of mixed cost because it has both fixed and variable components. The flat rent payment of $2,000 per month is a fixed cost, while the additional $0.10 for each hour the machine is used is a variable cost.

A Company Rents a Machine to Be Used in Operations