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Question
Select cost information for Winfrey Enterprises is as follows:
1,000 units of output 5,000 units of output
Total Cost/Unit Total Cost/Unit
Direct materials $5,000 $5.00 $25,000 $5.00
Utilities expense $1,000 $1.00 $ 3,750 $0.75
Rent expense $4,000 $4.00 $ 4,000 $0.80
Based on this information:
A. Both direct materials and rent expense are variable costs.
B. Utilities expense is a mixed cost and rent expense is a variable cost.
C. Utilities expense is a mixed cost and rent expense is a fixed cost.
D. Direct materials is a fixed cost and utilities expense is a mixed cost.
E. Both direct materials and utilities expense are mixed costs.
Answer
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