Classify each of the following as fixed or variable costs and give a brief explanation for your classification. If you think the costs could be partially fixed and partially variable, give your reasoning.
- Leased building for management personnel, where the monthly lease payment is set based on current market rates. Actual production takes place in a separate manufacturing facility.
- Similar to (1), but with a company-owned building.
- Payroll taxes when the employees are hourly workers employed on an as-needed basis, depending on production levels.
- Outsourced payroll services where the contract specifies a fixed fee and an additional fee per employee.