Consider the following equation:
Total cost = fixed costs + (cost driver rate $\times$ cost driver quantity)
If a cost can be estimated using this equation, it is probably a:
A) fixed cost.
B) variable cost.
C) mixed or semivariable cost.
D) non-linear cost.

Question

Quizplus · Accepted Answer

The equation includes both fixed costs and a cost driver rate, which suggests that the cost is a mixed or semivariable cost. This type of cost includes both fixed and variable components, and the equation allows for the calculation of total cost based on the quantity of the cost driver. The cost driver rate represents the variable component, while the fixed costs are included as a separate component in the equation.

Consider the Following Equation: Total Cost = Fixed Costs ×\times× Cost Driver Quantity) If a Cost Can Be Estimated Using

Consider the Following Equation:
Total Cost = Fixed Costs $\times$ Cost Driver Quantity)
If a Cost Can Be Estimated Using