The following data have been collected for four different cost items.

cost item cost at 100 units cost at 140 units

w $8,000 $10,560
x $ 5,000 $ 5,000
y $ 6,500 $ 9,100
z $6,700 $ 8,580

which of the following classifications of these cost items by cost behavior is correct?

cost w cost x cost y cost z
a) variable fixed mixed variable
b) mixed fixed variable mixed
c) variable fixed variable variable
d) mixed fixed mixed mixed

a. option a
b. option b
c. option c
d. option d

Option (B) is correct.

Explanation:

W.

For finding the variable expenses = change in the cost ÷ change in the quantity

= (10,560 - 8,000) ÷ (140 - 100)

= 2560 ÷ 40

= 64 per unit

total variable expenses for 100 units 64 × 100 = 6400

fixed expenses = 8000 - 6400

= 1600  so it is of MIXED

X.

Here at even different quantity cost is same so it is of fixed expenses

Y.

For variable expenses = (9100-6500) ÷ (140-100)

= 65 per unit

for variable expenses = 65 × 100

                                     = 6,500

so it is of fully variable expenses

Z.

variable expenses = (8,580 - 6,700) ÷ (140 - 100)

= 47 per unit

= 47 × 100

= 4,700

so it is of mixed expenses

answer; test-retest;