Question

Select cost information for Klondike Corporation is as follows:
1,000 units of output 2,000 units of output
Total Cost/Unit Total Cost/Unit
Direct materials $4,000 $4.00 $8,000 $4.00
Rent expense $2,000 $2.00 $ 2,000 $1.00

Based on this information:
A.Both direct materials and rent expense are variable costs.
B.Direct materials is a fixed cost and rent expense is a variable cost.
C.Both direct materials and rent expense are fixed costs..
D.Direct materials is a variable cost and rent expense is a fixed cost.
E.Both direct materials and utilities expense are mixed costs.

Answer

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