Which of the following is characteristic of a mixed cost?
A) contains only variable costs
B) will increase as output decreases
C) will decrease as output increases
D) contains both a fixed and variable component

Question

Quizplus · Accepted Answer

A mixed cost contains both a fixed and variable component. This means that as output increases, the variable portion of the cost will increase, while the fixed portion of the cost will remain constant. As output decreases, the variable portion of the cost will decrease, while the fixed portion of the cost will remain constant. A mixed cost is not purely variable or purely fixed, so A, B, and C are incorrect.

Which of the Following Is Characteristic of a Mixed Cost