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    Identify a cost: Variable, Fixed, Mixed, and Step Costs

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    Describe a variable, fixed, mixed and step cost in an organization. Would this organization be more likely to benefit from using a manufacturing cost hierarchy or a customer cost hierarchy for determining cost drivers? Why? Identify a cost in each of the four cost hierarchies.

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    https://brainmass.com/business/accounting/identify-a-cost-variable-fixed-mixed-and-step-costs-559629

    Solution Preview

    National Linen launders commercial tablecloths, bedding, garments and rags for restaurants, medical facilities, hotels and auto repair shops. Costs that fit each of the categories include:

    Variable: laundry soap, water, folding labor
    Fixed: plant rent, IT cost
    Mixed: utilities at the plant, fleet maintenance
    Step: supervision labor; number of delivery trips

    The firm is more likely to benefit from ...

    Solution Summary

    Your discussion is 257 words and describes a commercial laundry firm, explaining why customer cost would be a better hierarchy for them.

    $2.19

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