Question

Soothing Smoothie Inc. operates small stores in strip malls. It uses smoothles (units) sold as its measure of activity. Quarterly planning budget amounts and actual results for 3rd quarter of 20X1 are given in the table below. Flexible Actual Results Revenue & Spending Variances budget Activity Variances Planning Static) Budget Total Varlance Sales (units) 40,500 40.000 Revenue ($3.009) $117,450 $120.000 Expenses: $52.650 $3,240 $3.200 $18.675 $48.000 $4.000 $3.000 $20.000 COGS ($1.200) Supplies ($.100) Utilities ($3.000) Wages and salaries ($12,000 - $.200) Administrative Costs ($18.200 - $0.300) $40.000 $30.200 Total expenses $117.765 $105.200 $315) $14.800 Net operating Income (lossi Which term best describes the cost of "Utilities (as given in the table)?

Answer 1

Answer : Mixed cost

Cost which are partly fixed and partly variable is called mixed costs. Electricty,water, natural gas etc. are mixed cost. A minimum amount needs to pay as fixed cost even if not using.