Mixed costs question

[Amyshamy]

I found an exam book online and I'm going through the questions, testing my knowledge. I came across one that I could use some help.

There's a question about a truck driver getting played a fixed weekly pay X. In addition to that, he gets played Y for every mile he drives. Is his salary considered a mixed cost for the company?

 

[earl@cctg]

Yeah, that's a classic example of a mixed cost for the company! The X component is a fixed cost, incurred regardless of miles driven, while the Y component is a variable cost, directly dependent on the number of miles.

 

[chillywilly]

Yes, the truck driver's salary is a mixed cost for the company because it includes a fixed part (the weekly pay) plus a variable part (the pay per mile driven), combining both fixed and variable costs into one total expense.