Using Account Analysis, What Type of Cost Is Satellite TV

question 65

Multiple Choice

Using account analysis, what type of cost is Satellite TV when the charge is $30.00 per month plus $3.99 for pay-per-view movies?

• A) Fixed
• B) Mixed
• C) Step
• D) Variable

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Definitions:

Variable Cost

Costs that vary in direct proportion to changes in levels of production or sales, such as materials and labor directly involved in a product's manufacturing.

Units Sold

The total number of units of product sold within a specific time frame.

Conversion Costs

Costs that are incurred to convert raw materials into finished goods, which typically include labor and manufacturing overhead expenses.

Relevant Costs

Costs that should be considered when making business decisions because they will be affected by the decision.