Question

Rock Creek Bottling Company pays its production manager a salary of $6,000 per month. Salespersons are paid entirely on commission, at $1.50 for each case of product sold. For Rock Creek Bottling Company, the cost of the salespersons' commissions is an example of: Multiple Choice a fixed cost. a variable cost. a mixed cost. none of these

Answer 1

variable cost

Step-by-step explanation:

There are primarily two types of costs, i.e. variable costs and the fixed costs. The variable cost is the cost that varies as the level of production varies, while the fixed cost is the cost that stays constant whether the level of production changes or not. Thus, the variable cost includes indirect material, indirect labor and utilities. And, the fixed cost includes supervision and depreciation expense.

The mixed cost is a combination of the fixed cost and the variable cost

So sales per commission is depend on the number of units sold which is not fixed as it varies sales to sales

So this is an example of a variable cost