a . Two rules of thumb to use are ( a ) total fixed costs remain unchanged regardless of changes in cost-driver activity level , and ( b ) the per-unit variable cost remains unchanged regardless of changes in cost-driver activity level .
b .
Two rules of thumb to use are ( a ) how useful the analysis is to managers who want an estimate of the general relationship between production volume and costs , and ( b ) variable costs per unit increase as the cost driver increases but total variable costs remain constant .
c .
Two rules of thumb to use are ( a ) fixed costs per unit remain constant as the cost driver activity increases but total fixed costs decrease , and ( b ) variable costs do not vary with changes in the cost driver but do vary in direct proportion to the change in the cost driver .
d .
Two rules of thumb to use are ( a ) that the analysis is only as well as managers understand the cost behavior and how well managers can control the costs , and ( b ) the analysis examines how decisions about the volume of production and sales affect costs to ensure the company remains profitable .
6 . The following cost function is a mixed cost .
Total cost = $ 8,000 + $ 52 x units produced
Explain why it is a mixed cost and not a fixed , variable , or step cost .
The $ 8,000 is a fixed cost and the $ 52 per unit is a variable cost .