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Below Is a List of Costs

Question 19

Essay

Below is a list of costs. Classify each of them as variable, fixed, or mixed (a combination of variable and fixed components.)
a) Cost of raw materials used in producing a firm's products.
b) Property taxes.
c) Wages of sales staff paid on a salary plus commission basis.
d) Wages of hourly paid production-line workers.
e) Site licence for software.
f) Leasing costs for a delivery truck ($600 per month plus $0.40 per km.)
g) Packaging materials for products.
h) Insurance.

Correct Answer:

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a) Variable cost; b) Fixed cos...

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