Taran Company incurred the following costs for the months of January and February. Type of Cost...

Taran Company incurred the following costs for the months of January and February.

Type of Cost	January	February
Insurance	$ 5,000	$ 5,000
Utilities	4,000	5,000
Depreciation	3,500	3,500
Materials	10,000	20,000

From the information above we can assume that

	a.	output decreased from January to February.
	b.	insurance is a mixed cost.
	c.	output stayed the same from January to February.
	d.	insurance and depreciation are fixed costs

Solutions

Expert Solution

Total fixed costs and variable cost per unit do not change with change in units.On the other hand mixed cost is a combination of fixed and variable costs.

Hence insurance and depreciation are fixed costs that do not change with change in outputs.Output tends to increase from January to February as well.

Hence the correct option is D.

ekkarill92 answered 1 year ago

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