Which of the following is true of mixed costs?

a. Mixed costs are costs that have both a fixed cost and a variable cost component.

b. Mixed costs are costs that have both a discretionary fixed cost and a committed fixed cost component.

c. Mixed costs are variable costs whose rate of change is not constant.

d. Mixed costs are variable costs that can be changed or avoided easily in the short run.

Olivine Refrigerators has 10 sales representatives, each earning a salary of $45,000 per year plus a commission of $19 per refrigerator sold. If 31,000 refrigerators are sold, then the total cost associated with the sales representatives is:

a. $450,000.

b. $1,305,000.

c. $589,000.

d. $1,039,000.

In recording mixed costs such as utilities in the accounting records, usually, _____.

a. only the variable component is recorded

b. a clear distinction between fixed and variable costs is made

c. no attempt is made to separate variable and fixed costs

d. only the fixed component is recorded

For planning and control purposes, _____.

a. mixed costs should be considered sunk costs

b. mixed costs should be separated into variable and fixed components

c. only the fixed component of mixed costs should be considered

d. mixed costs should be ignored

A step cost with narrow steps means that the cost:

a. changes only if output changes in large quantities.

b. is a committed variable cost.

c. changes in response to small changes in output.

d. is a discretionary variable cost.

Olivine Refrigerators has 9 sales representatives, each earning a salary of $43,000 per year plus a commission of $22 per refrigerator sold. If 30,000 refrigerators are sold, then the total cost associated with the sales representatives is:

a. $1,333,000.

b. $660,000.

c. $1,047,000.

d. $387,000.