Classification of costs as fixed or variable


Task: Classification of Costs as Fixed or Variable

Below are a number of costs that are incurred in a variety of organizations.

Required: Classify each cost as being variable or fixed with respect to the number of units of product or services sold by the organization.

Cost Behavior

Cost

1. X-ray film used in the radiology lab at Virginia Mason Hospital in Seattle. __________

2. The costs of advertising a Madonna rock concert in New York City. __________

3. Rental cost of a McDonald's restaurant building in Hong Kong. __________

4. The electrical costs of running a roller coaster at Magic Mountain. __________

5. Property taxes on your local cinema. __________

6. Commissions paid to salespersons at Nordstrom. __________

7. Property insurance on a Coca-Cola bottling plant. __________

8. The costs of synthetic materials used to make Nike running shoes. __________

9. The costs of shipping Panasonic televisions to retail stores. __________

10. The cost of leasing an ultra-scan diagnostic machine at the American

Hospital in Paris. __________

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Accounting Basics: Classification of costs as fixed or variable
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