Question

Jack works on the production line at an assembly plant. Jack receives a base salary plus $1.25 per unit assembled. This is an example of a ______ cost.

Answer 1

Answer:

The correct word for the blank space is: mixed.

Explanation:

Mixed costs or semi-variable costs are the results of adding fixed costs (those that do not change) to a variable cost (vary in proportion to the level of activity). Different levels of production in a company determine how much the mixed cost will be.

Thus, in Jack's case, his salary is the fixed costs and the $1.25 per unit assembled is the variable cost.