• 1 Marks

MI – May 2018 – L1 – SA – Q4 – Cost Classifications

Identifying the components of mixed costs.

What are the components of mixed costs?
A. Fixed costs and variable costs
B. Relevant costs and irrelevant costs
C. Current costs and sunk costs
D. Direct costs and indirect costs
E. Controllable costs and uncontrollable costs

A. Fixed costs and variable costs
Explanation: Mixed costs, also known as semi-variable costs, consist of both fixed and variable components. The fixed part remains constant regardless of the production level, while the variable part fluctuates with changes in production volume. The correct answer is selected because it accurately reflects the definition of mixed costs.

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