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Classify the following as fixed or variable costs:
1. Advertising expenditure
2. Fuel
3. Interest on company-issued bonds
4. Shipping charges
5. Payments for raw materials
6. Real estate taxes
7. Executive salaries
8. Insurance premiums
9. Wage payments
10. Depreciation and obsolescence charges
11. Sales taxes
12. Rental payments on leased office machinery
a. variable cost
b. fixed cost

Sagot :

Answer and Explanation:

The classification is as follows:

1. Advertising expenditure - Variable cost  

2. Fuel - Variable cost  

3. Interest on company-issued bonds - fixed cost

4. Shipping charges - variable cost  

5. Payments for raw materials -  variable cost  

6. Real estate taxes - fixed cost

7. Executive salaries - fixed cost

8. Insurance premiums - fixed cost

9. Wage payments -  variable cost  

10. Depreciation and obsolescence charges - fixed cost

11. Sales taxes -  variable cost  

12. Rental payments on leased office machinery - fixed cost

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