Intuit Inc. develops and sells software products for the personal finance market

Question

Intuit Inc. develops and sells software products for the personal finance market, including popular titles such as Quickbooks® 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. Packaging costs b. Sales commissions c. Property taxes on general offices d. Shipping expenses e. Straight-line depreciation of computer equipment f. President’s salary g. Salaries of software developers h. Salaries of human resources personnel i. Wages of telephone order assistants j. Costs of providing online support k. Users' guides

Explanation / Answer

Solution:

From the given data we need to identify fixed and variable costs:

Variable expences:

Variable expenses are the aggregate costs that progressions with the adjustment in the level of activity.Variable expenses are specifically corresponding to the level of activity.It implies that the variable expense per unit does not change but rather the aggregate variable costs changes with the level of movement.

Fixed expenses:

Fixed expenses stay steady in aggregate sum over a particular scope of activity, these don't increment or reduction when the volume of make changes. Fixed expense per unit is contrarily relative to the level of movement.

   Costs and expenses Variable (or) Fixed a. Packaging costs Variable b. Sales commissions Variable c. Property taxes on general offices Fixed d. Shipping expenses Variable e. Straight-line depreciation of computer equipment Fixed f. President’s salary Fixed g. Salaries of software developers Fixed h. Salaries of human resources personnel Fixed i. Wages of telephone order assistants Fixed j. Costs of providing online support Variable k. Users' guides Variable

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