Variable, fixed, and mixed costs
Holly’s Day Care has been in operation for several years. Consider the following costs:
1. Building rent.
3. Salary of office manager, who also receives a bonus based on number of students enrolled.
4. Afternoon snacks.
5. Lawn service contract at $200 a month; any extra work needed is billed at an hourly rate based on the time needed to complete the job.
6. Holly’s salary.
7. Wages of afterschool employees.
8. Drawing paper for student art work.
9. Straight line depreciation of tables, chairs, and playground equipment.
10. Fee paid to security company for monthly service (contract includes up to four responses in a month; responses over four in a month incur an additional fee per response).
1. Identify the costs as variable (V), fixed (F), or mixed (M).