Intuit Inc. develops and sells software products for the personal finance market, including popular titles such as Quicken® and TurboTax®. Classify each of the following costs and expenses for this company as either variable or fixed to the number of units produced and sold:
a. Property taxes on general offices
b. President’s salary
c. Wages of telephone order assistants
d. Salaries of human resources personnel
e. Salaries of software developers
f. Packaging costs
g. CDs
h. Sales commissions
i. Straight-line depreciation of computer equipment
j. Users’ guides
k. Shipping expenses
Answer:
a. Fixed
b. Fixed
c. Variable
d. Fixed
e. Fixed*
f. Variable
g. Variable
h. Variable
i. Fixed
j. Variable
k. Variable
*The developer salaries are fixed because they are more variable to the number of titles or releases, rather than the number of units sold. For example, a title could sell one copy or a million copies, and the salaries of the developers would not be affected.