Taran Company incurred the following costs for the months of January and February. From the information above we can assume that
A) insurance and depreciation are fixed costs.
B) output decreased from January to February.
C) output stayed the same from January to February.
D) insurance is a mixed cost.

Question

Taran Company incurred the following costs for the months of January and February.  From the information above we can assume that
A) insurance and depreciation are fixed costs. 
B) output decreased from January to February. 
C) output stayed the same from January to February. 
D) insurance is a mixed cost.

Quizplus · Accepted Answer

The costs of insurance and depreciation remain constant even if the company produces more or less, suggesting that they are fixed costs. There is no information to suggest that output changed, so we cannot assume that it stayed the same or decreased. There is no information to suggest whether insurance is a mixed cost or not.

Taran Company Incurred the Following Costs for the Months of January