Mixed Costs

Question 1

What are mixed costs in accounting?

Answer 1

Mixed costs are expenses that contain both fixed and variable components.

Question 2

True or False: Mixed costs can be fully classified as either fixed or variable costs.

Answer 2

False

Question 3

Fill in the blank: The fixed component of mixed costs remains __________ regardless of production levels.

Answer 3

constant

Question 4

Which of the following is an example of a mixed cost? A) Rent for a factory B) Utility costs C) Direct materials

Answer 4

B) Utility costs

Question 5

What is the primary challenge in accounting for mixed costs?

Answer 5

Determining the fixed and variable components accurately.

Question 6

True or False: Mixed costs can be easily predicted based on production levels.

Answer 6

False

Question 7

Short Answer: Name one method used to separate mixed costs into fixed and variable components.

Answer 7

The high-low method.

Question 8

In the context of mixed costs, what does the term ‘relevant range’ refer to?

Answer 8

The range of activity within which the fixed cost remains unchanged.

Question 9

Multiple Choice: What type of analysis is often used to break down mixed costs? A) Cost-volume-profit analysis B) Break-even analysis C) Variance analysis

Answer 9

A) Cost-volume-profit analysis

Question 10

Short Answer: Why is it important to understand mixed costs in budgeting?

Answer 10

To accurately forecast expenses and make informed financial decisions.