Contemporary Engineering Economics 6th Edition by Chan Park

Exercise 2

Cost Behaviour
Identify which of the following costs are fixed, which are variable, and which are mixed.
• Wages paid to temporary workers.
• Property taxes on a factory building.
• Property taxes on an administrative building.
• Sales commission.
• Electricity for machinery and equipment in the plant.
• Heating and air-conditioning for the plant.
• Salaries paid to design engineers.
• Regular maintenance on machinery and equipment.
• Basic raw materials used in production.
• Factory fire insurance.