Sunset & Vine Wine Bar, a seasonal business, collected the following information for specific months of operation. Month Amount Hours Open Server labor costs September $5,600 280 February 2,400 120 Cleaning costs September 2,640 280 February 1,360 120 Which type of cost behavior do the server labor and cleaning costs exhibit? Server labor costs and cleaning costs are both variable costs. Server labor costs and cleaning are both mixed costs. Server labor costs are a mixed cost and cleaning costs are a variable cost. Cleaning costs are a mixed cost and server labor costs are a variable cost.
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Variable costs are costs that change in direct proportion to the level of activity or production. As the level of activity increases, variable costs also increase, and vice versa. Show more…
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