Which of the Following Is the Total Mixed Cost Equation

question 63

Multiple Choice

Which of the following is the total mixed cost equation for a factory where machine operating costs include $300,000 of machine depreciation per year,plus $70 of utility costs for each day the machinery is in operation?

• A)Y = $300,000 + $70X
• B)Y = 300,000X
• C)Y = $70X
• D)Y = $300,000 - $70X
• E)None of the answer choices is correct.

---

Definitions:

Costing Method

a technique or methodology used to determine the cost associated with a production process or project.

LCM Approach

The Lower of Cost or Market method, an accounting principle requiring inventory to be recorded at either its historical cost or market value, whichever is lower, to reflect potential losses.

Market Value

An estimation of the price at which an asset or company could be bought or sold in a current market.