A Cost That Has Characteristics of Both a Variable Cost

question 186

Multiple Choice

A cost that has characteristics of both a variable cost and a fixed cost is called a

• A) variable/fixed cost
• B) mixed cost
• C) discretionary cost
• D) sunk cost

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Definitions:

Overhead

The indirect costs or expenses associated with operating a business, including administrative, office, and rented space expenses.

Materials Ledger

A record of the quantity and value of materials on hand, received, and issued during a period.

Subsidiary Ledger

A detailed ledger that supplements a general ledger by providing detailed information for individual accounts, such as accounts payable or receivable.

Overapplied Overhead

A situation where the allocated manufacturing overhead cost for a period exceeds the actual overhead costs incurred, leading to a favorable variance.