The Allegheny School of Music has hired you as a consultant to help in analyzing the behavior of the school’s costs. Use the account-classification method of cost estimation to classify each of the following costs as variable, fixed, or semivariable. Before classifying the costs, choose an appropriate measure for the school’s activity.
1. Salaries and fringe benefits of the school’s full-time teachers.
2. Salaries and fringe benefits of the school’s full-time administrative staff.
3. Cost of buying books, sheet music, and other academic materials that are supplied to the students by the school.
4. Repairs on musical instruments. The school employs a full-time repair technician. Repair jobs that are beyond the technician’s capability are taken to a local musical-instrument dealer for repairs.
5. Fee charged by a local public accounting firm to audit the school’s accounting records.
6. Wages of the school’s part-time assistant recital instructors. These employees are hired on a temporary basis. For each student enrolled in the school’s music programs, four hours of assistant instructor time are needed per week.
7. Depreciation on the school’s musical instruments.
8. Rent for the building in which the school operates.
9. Electricity for the school. The school pays a fixed monthly charge plus $.11 per kilowatt-hour of electricity.