Mixed Costs in Accounting

The video tutorial explains mixed costs, which include both variable and fixed cost elements. Using a cell phone bill as an example, it describes how mixed costs have a base amount and additional charges based on usage. The tutorial introduces the equation Y = MX + B to express the relationship between mixed costs and activity levels, where Y is the total cost, M is the variable cost per unit, X is the level of activity, and B is the total fixed cost. It also covers how to graph mixed costs, showing both variable and fixed cost elements.

What does the 'M' represent in the mixed cost equation?

Describe how a mixed cost graph differs from a graph of purely variable or fixed costs.