# ABC Company reported the following cost information: June July Cost A $16,380$25,160 Cost...

## Question:

ABC Company reported the following cost information:

 June July Cost A $16,380$25,160 Cost B $55,440$89,760 Cost C $37,380$37,380 Units sold 42,000 units 68,000 units

Which of the above costs would be classified as a mixed cost?

## What Is A Mixed Cost:

Although costs are generally classified as variable or fixed, in reality many costs are a combination of the two. This is the definition of a Mixed Cost (i.e. a cost that has both a variable and a fixed cost component and thus does not have a steady incremental cost).

Cost C is fixed because it does not vary.

Cost B is variable because the cost varies proportionally to the number of units produced.

=55,4400*68,000/42,000

=$89,760 Cost A is mixed because the cost varies however not proportionally to the number of units produced. =16,380 *68,000/42,000 =$26,520

• This is different than \$25,160.