Reference no: EM131368193

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.

1. 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.
2. Similar to (1), but with a company-owned building.
3. Payroll taxes when the employees are hourly workers employed on an as-needed basis, depending on production levels.
4. Outsourced payroll services where the contract specifies a fixed fee and an additional fee per employee.