Mixed Costs in Accounting

The video tutorial explains mixed costs, which include both variable and fixed cost elements. Using a cell phone bill as an example, it describes how mixed costs have a base amount and additional charges based on usage. The tutorial introduces the equation Y = MX + B to express the relationship between mixed costs and activity levels, where Y is the total cost, M is the variable cost per unit, X is the level of activity, and B is the total fixed cost. It also covers how to graph mixed costs, showing both variable and fixed cost elements.

What is an example of a mixed cost?

• A one-time purchase

• A cell phone bill

• A subscription service

• A fixed salary

In the equation Y = MX + B, what does 'M' represent?

• Level of activity

• Variable cost per unit

• Fixed cost

• Total cost

What does 'B' stand for in the equation Y = MX + B?

• Total fixed cost

• Total cost

• Variable cost per unit

• Level of activity

How does a mixed cost graph differ from a simple variable cost graph?

• It has a flat fee and a slope

• It starts at the origin

• It is a horizontal line

• It only has a slope

Where does the graph of a mixed cost start on the Y-axis?

• Below the origin

• At the maximum value

• Higher on the Y-axis

• At the origin