A Farmer near Medicine Hat Hires a Grain Harvesting Crew

A farmer near Medicine Hat hires a grain harvesting crew from Saskatchewan to harvest his wheat at the end of each summer. Because the crop yield varies from year to year, the crew charges the
Farmer according to the number of bushels actually harvested each year. For capital budgeting
Purposes, the harvesting charges should be classified as

A) A fixed cost since they must be paid each year.
B) A fixed cost since the crew will be paid regardless of whether or not the crop is harvested.
C) A variable cost since, if the crop yield is zero bushels, the crew receives no payment.
D) A combination of fixed and variable cost, the variable portion of which is based on forecast bushels harvested.
E) A variable cost only if the crop yield is poor in a given year.