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In MA2, Bpp book.
We are given cost behaviours other than basic four (Fixed, Variable, Mixed and Step fixed).One of them is minimum charge. Can you please explain what is difference between minimum charge and mixed cost?
Mixed cost is probably a cost like like electricity where there might be a fixed monthly charge and on top of that a charge related to each unit of usage.
A minimum charge is quite similar. However, the fixed element will include a charge for minimum usage (eg 5000KWH). Up to that usage there is no additional charge but above that there will be a charge per unit used.
So, it’s like mixed costs but the variable element does not start until a certain amount of usage (the minimum charge amount) has been incurred.
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