Which of the Following Is the Correct Formula for Calculating

question 44

Multiple Choice

Which of the following is the correct formula for calculating total mixed cost?

• A) Total mixed cost = (Variable cost per unit / Number of units) + Total fixed cost
• B) Total mixed cost = (Variable cost per unit × Number of units) - Total fixed cost
• C) Total mixed cost = (Variable cost per unit × Number of units) + Total fixed cost
• D) Total mixed cost = (Variable cost per unit / Number of units) - Total fixed cost

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Definitions:

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.

Margin of Safety

The difference between actual or projected sales and the break-even point; it measures the amount by which sales can drop before reaching the break-even point.

Profit-Volume Chart

A graphical representation that shows the relationship between a firm's profits and its volume of sales.

Cost-Volume-Profit Chart

A graphical representation that shows the relationship between a company's costs, sales volume, and profits.