Question
The CEO of Risk United, a medical device company, is interested in expanding the business to a new location. The CEO is putting together a
The CEO of Risk United, a medical device company, is interested in expanding the business to a new location. The CEO is putting together a proposal to present to the board and has asked you to identify the types of costs the company incurs daily.
For each Characteristic, select the Type of Cost that matches the characteristic: fixed, variable, or mixed cost in the first table. Explain.
1. One cost component remains the same as other cost components increase and decrease with activity.
2. Costs that don't change in total within the relevant range of activity.
3. Costs per unit remain unchanged as the activity level increases or decreases.
4. As activity levels change, costs will increase or decrease.
5. Costs are set over a given range of activity and jump when activity increases beyond the given range.
6. Cost per unit decreases as production increases and increases as production decreases.
7. Costs that are incurred only when a product is made or sold.
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