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Which of the following is an example of a mixed cost? Oa. electricity costs of $3 per kilowatt-hour b. straight-line depreciation on factory equipment Oc. rental costs of $10,000 per month plus $0.30 per machine hour of use Od. salary of a factory supervisor

Which of the following is an example of a mixed cost? Oa. electricity costs of $3 per kilowatt-hour b. straight-line depreciation on factory equipment Oc. rental costs of $10,000 per month plus $0.30 per machine hour of use Od. salary of a factory supervisor

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Question:** Which of the following is an example of a mixed cost? **Options:** a. Electricity costs of $3 per kilowatt-hour b. Straight-line depreciation on factory equipment c. Rental costs of $10,000 per month plus $0.30 per machine hour of use d. Salary of a factory supervisor **Explanation:** - **Option a:** Represents a variable cost as it depends on the usage. - **Option b:** Represents a fixed cost, as straight-line depreciation remains constant over time. - **Option c:** This is a mixed cost, as it includes both a fixed monthly rental fee and a variable component depending on machine usage. - **Option d:** Represents a fixed cost, as the supervisor's salary typically doesn't fluctuate with production levels. For this question, option **c** is correct, demonstrating an example of a mixed cost.
Transcribed Image Text:**Question:** Which of the following is an example of a mixed cost? **Options:** a. Electricity costs of $3 per kilowatt-hour b. Straight-line depreciation on factory equipment c. Rental costs of $10,000 per month plus $0.30 per machine hour of use d. Salary of a factory supervisor **Explanation:** - **Option a:** Represents a variable cost as it depends on the usage. - **Option b:** Represents a fixed cost, as straight-line depreciation remains constant over time. - **Option c:** This is a mixed cost, as it includes both a fixed monthly rental fee and a variable component depending on machine usage. - **Option d:** Represents a fixed cost, as the supervisor's salary typically doesn't fluctuate with production levels. For this question, option **c** is correct, demonstrating an example of a mixed cost.
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