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    Question

    A salesperson in an organization have a fixed salary of

    $2,000 per month, and an additional commission of 10% on all sales made. This is an example of which type of cost?
    A Fixed Cost Correct Answer Incorrect Answer
    B Variable cost Correct Answer Incorrect Answer
    C Semi variable cost Correct Answer Incorrect Answer
    D Opportunity cost Correct Answer Incorrect Answer
    E Marginal cost Correct Answer Incorrect Answer

    Solution

    In the above question the salary cost is semi-variable as it consists of a fixed component (base pay) and a variable component (commission). The variable component of the cost changes based on the level of sales made, while the fixed component remains constant over the period.

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