Classification of Costs: Behaviors - fixed, variable and mixed costs

Question 1

Fixed Costs Def+ Example

Answer 1

Those that do not change in total when the level of activity changes e.g. rent

Question 2

Variable Cost Def + Example

Answer 2

One that changes in total as the level of activity changes. For e.g., cost of raw materials in total will increase as the level of units produced overseas

Question 3

Mixed costs + example

Answer 3

Costs which contain both fixed and variable elements. Eg , telephone bill will contain line rental which is fixed cost and cost of phone calls made which is a variable cost