Suppose that a company pays a flat rate for its water consumption less than or equal...
Suppose that a company pays a flat rate for its water consumption less than or equal to 20,000 gallons per month, but $25 per thousand gallons in excess of 20,000. What kind of cost behavior does this represent?
Question 6 options:
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A Mixed Cost |
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A Fixed Cost |
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A Variable Cost |
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A Sunk Cost |
Homework Answers
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Answer : A mixed cost
Mixed costs are costs that contain a portion of both fixed and variable costs. Common examples include utilities and even your cell phone.
We pay a fixed cost for 20000 gallon or less water consumed and a variable cost of $25 per thousand gallons consumed.
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Suppose that a company pays a flat rate for its water
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3. Suppose that it costs a public water supply company a total of TC = 55+0.04W2...
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