Multiple Choice
Another term for the minimum required rate of return is the cost of:
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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A cost that contains both variable and fixed cost elements is called a(n):
A
Mixed cost
B
Fixed cost
C
Variable cost
D
Direct cost
Verified step by step guidance1
Understand the definitions of the cost types provided in the options: Fixed cost, Variable cost, Direct cost, and Mixed cost.
Fixed cost: This is a cost that does not change with the level of production or activity. Examples include rent and salaries.
Variable cost: This is a cost that changes directly with the level of production or activity. Examples include raw materials and direct labor.
Direct cost: This is a cost that can be directly traced to a specific product or activity. Examples include direct materials and direct labor.
Mixed cost: This is a cost that contains both fixed and variable elements. For example, a utility bill may have a fixed base charge plus a variable charge based on usage. Based on this definition, the correct answer is Mixed cost.
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