Question

Two costs at Bradshaw Company appear below for specific months of operation. Month Amount Units Produced Delivery costs September $40,000 40,000 October 55,000 60,000 Utilities September $84,000 40,000 October 126,000 60,000 Which type of costs are these? Utilities are mixed and delivery costs are variable. Delivery costs and utilities are both mixed. Delivery costs are mixed and utilities are variable. Delivery costs and utilities are both variable.Which type of costs are these?
(a) Delivery costs are mixed and utilities are variable.
(b) Delivery costs and utilities are both variable.
(c) Delivery costs and utilities are both mixed.
(d) Utilities are mixed and delivery costs are variable

Answer 1

Answer:

(a) Delivery costs are mixed and utilities are variable.

Explanation:

Mixed costs are costs that are fixed and variable, for example, delivery costs are mixed because of the fixed cost of having the delivery equipment, like trucks and cars, and the variable is the amount of gas that you pay for it, then utilities are variable because the problem doesn´t specify that they are not.