A cost that can be separated into fixed and variable components is called a:
A) Mixed cost.
B) Step-variable cost.
C) Composite cost.
D) Curvilinear cost.
E) Differential cost.

Question

Quizplus · Accepted Answer

A mixed cost is a cost that has both fixed and variable components. The fixed component remains the same regardless of the level of activity, while the variable component changes with the level of activity. A step-variable cost has a fixed cost component for a range of activity levels, but the cost increases in steps as the activity level increases beyond those ranges. A composite cost is a cost made up of multiple components, but those components may not necessarily be fixed and variable. A curvilinear cost is a cost that increases non-linearly with the level of activity. A differential cost is the difference in cost between two alternatives.

A Cost That Can Be Separated into Fixed and Variable