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   Identifying Fixed, Variable, Mixed, and Step Costs

   Consider each of the following independent situations:

   Required:

   1. For each situation, describe the cost as one of the following: fixed cost, variable cost, mixed cost, or step cost. (Hint: First, consider what the driver or output measure is. If additional assumptions are necessary to support your cost type decision, be sure to write them down.)

   Example: Raw materials used in production - Variable cost

   a. A computer service agreement in which a company pays $150 per month and $15 per hour of technical time.	Fixed costMixed costStep costVariable cost
   b. Fuel cost of the company's fleet of motor vehicles.	Fixed costMixed costStep costVariable cost
   c. The cost of beer for a bar.	Fixed costMixed costStep costVariable cost
   d. The cost of computer printers and copiers at your college.	Fixed costMixed costStep costVariable cost
   e. Rent for a dental office.	Fixed costMixed costStep costVariable cost
   f. The salary of a receptionist in a law firm.	Fixed costMixed costStep costVariable cost
   g. The wages of counter help in a fast-food restaurant. (Assume that the counter help can be called in or sent home as the need arises.)	Fixed costMixed costStep costVariable cost
   h. The salaries of dental hygienists in a three-dentist office. One hygienist can take care of 120 cleanings per month.	Fixed costMixed costStep costVariable cost
   i. Electricity cost which includes a $15 per month billing charge and an additional amount depending on the number of kilowatt-hours used.	Fixed costMixed costStep costVariable cost