Fact Pattern:

A company wants to determine its marketing costs for budgeting purposes. Activity measures and costs incurred for 4 months of the current year are presented in the table below. Advertising is considered to be a discretionary cost. Salespersons are paid monthly salaries plus commissions. The sales force was increased from 20 to 21 individuals during the month of May.

	March	April	May	June
Activity measures:
Sales orders	2,000	1,800	2,400	2,300
Units sold	55,000	60,000	70,000	65,000
Dollar sales	$1,150,000	$1,200,000	$1,330,000	$1,275,000
Marketing costs:
Advertising	$ 190,000	$ 200,000	$ 190,000	$ 190,000
Sales salaries	20,000	20,000	21,000	21,000
Commissions	23,000	24,000	26,600	25,500
Shipping costs	93,000	100,000	114,000	107,000
Total costs	$ 326,000	$ 344,000	$ 351,600	$ 343,500

Which of the following most appropriately describes the classification and behavior of shipping costs?

Classification	Behavior

a. Variable cost

$1.66 per unit sold

b. Mixed cost

$30,000 per month plus $35.00 per sales order

c. Mixed cost

$58,000 per month plus $23.33 per sales order

d. Mixed cost

$16,000 per month plus $1.40 per unit sold