Final answer:
The correct classification of cost items by cost behavior is B) mixed, fixed, variable, mixed. Cost W is variable, Cost X is fixed, Cost Y and Cost Z are mixed having elements of both variable and fixed costs.
"The correct option is approximately option B"
Step-by-step explanation:
The classifications of cost items by cost behavior can be determined by examining how costs change when production levels change. Cost behavior can be classified into fixed, variable, and mixed costs. Fixed costs do not vary with the level of output, variable costs change directly with the level of output, and mixed costs have elements of both fixed and variable costs.
Analysis of Each Cost:
- Cost W: Increases as production increases, indicating that it's a variable cost.
- Cost X: Remains the same regardless of production level, indicating that it's a fixed cost.
- Cost Y: Increases as production increases but not in direct proportion, indicating that it's a mixed cost.
- Cost Z: Increases with production but not in direct proportion, another example of a mixed cost.
Therefore, the correct classification according to the given data would be:
- Cost W: Variable
- Cost X: Fixed
- Cost Y: Mixed
- Cost Z: Mixed
The correct answer is option B) mixed, fixed, variable, mixed.