Question

Southern Food Service operates six restaurants in the Atlanta area. The company pays rent of $20,000 per year for each shop. The managers of each shop are paid a salary of $4,200 per month and all other employees are paid on an hourly basis. Relative to the number of hours worked, total compensation cost for a particular shop is which kind of cost

Answer 1

Answer:

mixed cost

Explanation:

Southern Food Service pays their employees on both a fixed and variable manner:

• managers are paid on a monthly fixed way ($4,200 per month) ⇒ fixed cost
• the rest of the employees are paid on an hourly basis, which obviously varies depending on the amount of hours each person works ⇒ variable cost