(Solved by Humans)-Problem 3-40 Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following...

Paper Details

Problem 3-40     Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent situations: a.       A computer service agreement in which a company pays $150 per month and $15 per hour of technical time   (Continued)                                                                                b.       Fuel cost of the company’s fleet of motor vehicles c.        The cost of beer for a bar d.       The cost of computer printers and copiers in your college e.        Rent for a dental office f.        The salary of a receptionist in a law firm g.        The wages of counter help in a fast-food restaurant h.       The salaries of dental hygienists in a three-dentist office. One hygienist can take care of 120 cleanings per month i.         Electricity cost which includes a $15 per month billing charge and an additional amount depending on the number of kilowatt-hours used Required: 1.       For each situation, describe the cost as one of the following: fixed cost, variable cost, mixed cost, or step cost. (Hint: First, consider what the driver or output measure is. If additional assumptions are necessary to support your cost type decision, be sure to write them down.) Example: Raw materials used in production—Variable cost 2.       CONCEPTUAL CONNECTION Change your assumption(s) for each situation so that the cost type changes to a different cost type. List the new cost type and the changed assump- tion(s) that gave rise to it. Example: Raw materials used in production. Changed assumption—the materials are difficult to obtain, and a year’s worth must be contracted for in advance. Now, this is a fixed cost.  (This is the case with diamond sales by DeBeers Inc. to its sightholders. See the following website for information:    www.keyguide.net/sightholders/.)