Costs that cannot be identified as purely fixed or variable are ______ costs.

Costs that cannot be identified as purely fixed or variable are ______ costs.

• A. Mixed; Semivariable
• B. Step cost
• C. Fixed costs
• D. Variable costs

Answer: (A)

Costs that cannot be identified as purely fixed or variable are mixed costs (also called semivariable costs). A mixed cost has a fixed portion that does not change with activity and a variable portion that increases with activity. Because of this blend, it isn’t appropriate to label the total cost as purely fixed or purely variable. Think of a maintenance bill that has a base service charge plus costs that vary with usage—the total cost changes with activity, but not in a strictly fixed or purely proportional way. Step costs differ because they stay fixed over a range and then jump to a higher fixed amount when activity passes a threshold, so they aren’t considered mixed across the full range. Pure fixed costs stay constant regardless of activity, and pure variable costs change directly with activity.

Costs that cannot be identified as purely fixed or variable are mixed costs (also called semivariable costs). A mixed cost has a fixed portion that does not change with activity and a variable portion that increases with activity. Because of this blend, it isn’t appropriate to label the total cost as purely fixed or purely variable. Think of a maintenance bill that has a base service charge plus costs that vary with usage—the total cost changes with activity, but not in a strictly fixed or purely proportional way. Step costs differ because they stay fixed over a range and then jump to a higher fixed amount when activity passes a threshold, so they aren’t considered mixed across the full range. Pure fixed costs stay constant regardless of activity, and pure variable costs change directly with activity.