Question

A) For each of the following independent situations, use a “X” to indicate the nature of the costs as variable, fixed, mixed, or step costs. The first one is done for you.

	Variable cost	Fixed cost	Mixed cost	Step cost
The depreciation cost of a machine that is calculated on a straight-line basis.		X
The salary of a legal secretary in a law firm
A lease contract for a truck that requires a monthly payment of $200 plus $0.07 per kilometre.
The cost of lumber for a homebuilder.
A cell phone contract where there is a minimum cost per month plus additional cost for usage.
The cost of internet service that is calculated based on hours of usage.
The salary cost of seasonal tax preparers for a CPA firm. One tax preparer can prepare 100 tax returns per month.
A factory supervisor’s salary
The cost of sugar in the production of soft drinks.
The cost of reimbursing employees for the use of their automobiles where they are paid on the basis of the number of kilometres driver each month.
The cost of leasing an automobile where the lessee is granted a certain number of kilometres during the
lease, then is charged extra beyond the maximum allowed.
The cost of sales supervisors’ salaries where 1 supervisor can supervisor 10 employees.
The delivery cost for a courier where the costs include wages of an employee, depreciation of the vehicle, and fuel costs.

Answer 1

Answer:

	Variable cost	Fixed cost	Mixed cost	Step cost
The depreciation cost of a machine that is calculated on a straight-line basis.		X
The salary of a legal secretary in a law firm		X
A lease contract for a truck that requires a monthly payment of $200 plus $0.07 per kilometre.			X
The cost of lumber for a homebuilder.	X
A cell phone contract where there is a minimum cost per month plus additional cost for usage.				X
The cost of internet service that is calculated based on hours of usage.		X
The salary cost of seasonal tax preparers for a CPA firm. One tax preparer can prepare 100 tax returns per month.		X
A factory supervisor’s salary		X
The cost of sugar in the production of soft drinks	X
The cost of reimbursing employees for the use of their automobiles where they are paid on the basis of the number of kilometres driver each month.	X
The cost of leasing an automobile where the lessee is granted a certain number of kilometres during the lease, then is charged extra beyond the maximum allowed.				X
The cost of sales supervisors’ salaries where 1 supervisor can supervisor 10 employees.		X
The delivery cost for a courier where the costs include wages of an employee, depreciation of the vehicle, and fuel costs.		X