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 variable costs.
B. Direct materials is a fixed cost and rent expense is a variable cost.
C. Direct materials is a variable cost and rent expense is a fixed cost.
D. Both direct materials and rent expense are mixed costs.
E. Both direct materials and rent expense are fixed costs.
Answer: C
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