Select cost information for Klondike Corporation is as follows: 1,000 units of output 2,000 units of output TotalCost/Unit TotalCost/UnitDirect materials$4,000$4.00 $8,000$4.00Rent expense$2,000$2.00 $2,000$1.00Based on this information:
A. Both direct materials and rent expense are fixed costs.
B. Both direct materials and rent expense are variable costs.
C. Both direct materials and rent expense are mixed costs.
D. Direct materials is a fixed cost and rent expense is a variable cost.
E. Direct materials is a variable cost and rent expense is a fixed cost.
Answer: E
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