This document classifies 12 costs as either fixed, variable, or mixed based on their behavior in relation to changes in production volume. Rent on a factory building, a computer lease with fixed and variable portions, property taxes on a plant, and the salaries of a plant superintendent and controller are identified as fixed costs. Costs of tires, paint, direct labor, and indirect labor are variable costs that change with production volume. Depreciation on machinery, fire insurance on a plant, and electricity costs for a plant are mixed costs that have characteristics of both fixed and variable classifications.

1. Identifying cost behavior classifications
Following is a list of costs that you are to classify into their most likely category:
Fixed
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rent on factory building - $ 2,200 per month
cost of tires installed on products
depreciation on machinery-straight line
cost of paint used on products
fire insurance on plant
direct labor
plant superintendent’s salary
computer lease cost - $ 500 per month plus $ 30 per
hour of computer
property taxes on plant
controller’s salary
electricity costs for plant
Indirect labor
Variable Mixed