Question: Data for Cost A and Cost B appear below: Units Produced Cost Per Unit Total Cost Cost A 1 ? $10 10 ? $100 100

Data for Cost A and Cost B appear below:

Units Produced

Cost Per Unit

Total Cost

Cost A

1

?

$10

10

?

$100

100

?

$1,000

1,000

?

$10,000

Cost B

1

$5,000

?

10

$500

?

100

$50

?

1,000

$5

?

Which of the above best describes the behavior of Costs A and B?

A.

Cost A is fixed, Cost B is variable.

B.

Cost A is variable, Cost B is fixed.

C.

Both Cost A and Cost B are variable.

D.

Both Cost A and Cost B are fixed.

In describing the cost equation, Y = a + bX, "a" is:

A.

the dependent variable cost.

B.

the independent variable the level of activity.

C.

the total fixed cost.

D.

the variable cost per unit of activity.

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