Intuit Inc. develops and sells software products for the personal finance market, including popular titles such as Quicken® and TurboTax®

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.





For a major university, match each cost in the following table with the activity base most appropriate to it. An activity base may be used more than once, or not used at all.


Cost:
1. Financial aid office salaries
2. Office supplies
3. Instructor salaries
4. Housing personnel wages
5. Student records office salaries
6. Admissions office salaries


Activity Base:
a. Number of enrollment applications
b. Number of students
c. Student credit hours
d. Number of enrolled students and alumni
e. Number of financial aid applications
f. Number of students living on campus


Answer:
1. e
2. b
3. c
4. f
5. d