question archive Since Bonnie Parker Pizza is open 24 hours a day, its pizza oven is constantly on and is, therefore, always using natural gas

Since Bonnie Parker Pizza is open 24 hours a day, its pizza oven is constantly on and is, therefore, always using natural gas

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Since Bonnie Parker Pizza is open 24 hours a day, its pizza oven is constantly on and is, therefore, always using natural gas. However, when there is no pizza in the oven, the oven automatically lowers its flame and reduces its natural gas usage by 70%. The cost of natural gas would best be described as

fixed cost

benchmark cost

true variable cost

mixed cost

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Answer:

Mixed cost

since variable cost changes with change in production and fixed remains same irrespective of units produced,it will best is described as mixed cost and when the oven is not in use there is saving (variable cost) still there will be some cost incurred(fixed )