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Question
Observe the image and identify the type of cost.
Options
Fixed Cost
Variable Cost
Semi-variable Cost
Direct material
MCQ
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Solution
Semi-variable Cost
Explanation:
The image shows an electricity bill and an electricity meter. Electricity charges usually consist of:
- A fixed charge (paid every month regardless of usage), and
- A variable charge (based on the number of units consumed).
Therefore, electricity cost is a semi-variable (mixed) cost because it contains both fixed and variable elements.
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