Question 2 (fixed/mixed/variable costs) Generic Motors incurs three types of costs (a, b and c) in its manufacturing process. The following table presents total costs for each type for two different activity levels:

	(a)	(b)	(c)
5,000 units	$40,000	$60,000	$15,000
7,500 units	$60,000	$70,000	$15,000

Required: Identify whether each cost is fixed, mixed or variable? Cost a =

fixed variable mixed

Cost b =

mixedvariable fixed

Cost c =

variablefixed mixed