Classify the following as fixed or variable costs:

1. Fuel

2. Interest on company-issued bonds

3. Shipping charges

4. Payments for raw materials

5. Real estate taxes

6. Executive salaries

7. Insurance premiums

8. Wage payments

9. Depreciation and obsolescence charges

10. Sales taxes

11. Rental payments on leased office machinery

Fixed cost: Interest on company-issued bonds, Real estate taxes, Executive salaries, Insurance premiums, Wage payments, Depreciation and obsolescence charges, Sales taxes, Rental payments on leased office machinery

Variable cost: Fuel, Shipping charges, Payments for raw materials,

Explanation:

Fixed costs are costs that are not changed regardless of quantity of goods being produced such as rent for equipment, taxes, depreciation and so on.

Variable costs are costs that change with regard to the quantity of goods being produced such as cost of raw materials, cost of packaging and so on.

Example of fixed and variable costs are:

Fixed cost: Interest on company-issued bonds, Real estate taxes, Executive salaries, Insurance premiums, Wage payments, Depreciation and obsolescence charges, Sales taxes, Rental payments on leased office machinery Variable cost: Fuel, Shipping charges, Payments for raw materials,