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
Subject:AccountingPrice:2.87 Bought7
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
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 )