Explain the differences between a variable, fixed, and a mixed cost
A variable cost changes in direct proportion to changes in the cost driver within the relevant range. A variable cost remains the same on a per-unit basis regardless of changes in output. A fixed cost stays the same in total at all levels within the relevant range. On a per-unit basis, a fixed cost will decrease when output increases and vice versa. A mixed cost has both a fixed and a variable component.
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