E2-29A Classify costs as fixed or variable (Learning Objective 7)

Identify whether the following costs would be normally be a fixed cost (FC) or a variable cost (VC).

a. Direct labor in Toyota’s factory

b. Depreciation of office equipment

c. Accountant’s salary at KFC

d. Cost of electricity in a production factory

e. Advertising expenses of a soft drink

f. Materials used in fruit juice production g. Depreciation of factory equipment h. A production manager’s fixed petrol allowance i. Spare part in motor vehicle production j. Monthly rental for a retail shop k. Commission of an insurance agent l. Insurance premium for an office