Classify costs as fixed or variable (Learning Objective 7)

Classify each of the following costs as fixed or variable:

a. Thread used by a garment manufacturer

b. Property tax on a manufacturing facility

c. Yearly salaries paid to sales staff

d. Gasoline used to operate delivery vans

e. Annual contract for pest (insect) control

f. Boxes used to package breakfast cereal at Kellogg’s g. Straight-line depreciation on production equipment h. Cell phone bills for sales staff—contract billed at $.03 cents per minute i. Wages paid to hourly assembly-line workers in the manufacturing plant j. Monthly lease payment on administrative headquarters k. Commissions paid to the sales staff—5% of sales revenue l. Credit card transaction fee paid by retailer—$0.20 per transaction plus 2% of the sales amount m. Annual business license fee from city n. Cost of ice cream sold at Baskin-Robbins o. Cost of shampoo used at a hair salon