Question

Select cost information for Seacrest Enterprises is as follows: 1,000 units of output 5,000 units of output Total Cost/Unit Total Cost/UnitDirect materials $5,000 $5.00 $25,000 $5.00Utilities expense $1,000 $1.0 0 $3,750 $0.75Rent expense $4,000 $4.00 $4,000 $0.80Based on this information:a. Both direct materials and rent expense are variable costs.b. Utilities expense is a mixed cost and rent expense is a variable cost.c. Utilities expense is a mixed cost and rent expense is a fixed cost.d. Direct materials is a fixed cost and utilities expense is a mixed cost.e. Both direct materials and utilities expense are mixed costs.

Answer 1

c. Utilities expense is a mixed cost and rent expense is a fixed cost.

Step-by-step explanation:

Seacrest Enterprises

1000 units 5000 Units

Total Cost Total Cost /Unit Total Cost Total Cost/Unit

Direct materials $5,000 $5.00 $25,000 $5.00

Utilities expense $1,000 $1.0 0 $3,750 $0.75

Rent expense $4,000 $4.00 $4,000 $0.80

Direct Materials show variable Costs

Utilities expense show mixed costs

Rent Expense show fixed costs

The correct answer is

c. Utilities expense is a mixed cost and rent expense is a fixed cost.