Question

Which of the following costs is a mixed cost?

1. Salary of a factory supervisor
2. Electricity costs of $2 per kilowatt-hour
3. Rental costs of $5,000 per month plus $.30 per machine hour of use
4. Straight-line depreciation on factory equipment

Answer 1

3. Rental costs of $5,000 per month plus $.30 per machine hour of use

Step-by-step explanation:

Mixed cost is the one which has both the factors, variable and fixed.

Sometimes, the segregation is also difficult, when the total cost is given.

In the chosen option also, there is a fixed cost involved that is monthly expense of $5,000.

Further for each hour of machine used the cost increases and is $0.30 per hour.

That is variable as the total will depend upon the number of hours the machine is used.

All the other three are either completely fixed like salary, and depreciation, or either completely variable like electricity cost.