Stewart Company is attempting to classify costs according to their cost behavior. Data concerning activity and costs are listed below:
-The costs that Stewart Company would classify as mixed would be:
A) lubrication and advertising.
B) maintenance and insurance.
C) supplies and lubrication.
D) supplies and utilities.

Question

Stewart Company is attempting to classify costs according to their cost behavior. Data concerning activity and costs are listed below: 
-The costs that Stewart Company would classify as mixed would be:
A) lubrication and advertising. 
B) maintenance and insurance. 
C) supplies and lubrication. 
D) supplies and utilities.

Quizplus · Accepted Answer

Mixed costs have both fixed and variable components. Among the given options, supplies and lubrication are likely to be mixed costs because the cost of supplies (such as oil and filters) may vary with the level of activity (variable component), while there may be a fixed component to the cost of lubrication (such as the cost of equipment or labor). The other options, maintenance and insurance, are likely to be mostly fixed costs, while advertising and utilities are likely to be mostly variable costs.

Stewart Company Is Attempting to Classify Costs According to Their