Question

A mixed cost is often known as a:

A. semivariable cost.
B. step-fixed cost.
C. variable cost.
D. curvilinear cost.
E. discretionary cost.

Answer 1

A mixed cost is known as a semivariable cost and includes both fixed and variable components, providing insights into a firm's cost structure.

Step-by-step explanation:

A mixed cost is often known as a semivariable cost. This type of cost consists of both fixed and variable components. The fixed component is constant regardless of the level of production or service, while the variable component fluctuates with the level of output.

Lessons from Alternative Measures of Costs suggest that breaking down total costs into fixed cost, marginal cost, average total cost, and average variable cost is useful for a firm because it provides various insights. For instance, average total cost, average variable cost, and marginal cost are new measures that analyze costs on a per-unit basis, offering a deeper understanding of the cost structure of a business as production levels change.

The general patterns of these cost curves—including those for fixed costs, variable costs, marginal costs, average total costs, and average variable costs—remain consistent across firms, even though the exact numerical calculations may differ.