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The following are costs were incurred by New Balance. (Assume this list is all the costs incurred to produce and sell the shoes, even though it is not all the costs a company like New Balance would incur.) Remember: . All costs that are annually or monthly are fixed. They do not change because production or sales is more or less. All costs that are "per shoe are variable. Each time another shoe is produced, this much additional cost must be incurred. The sales commission varies with sales dollars. As sales increase the total cost will increase. For variable costs, total costs change with changes in sales or production. Determine which costs are fixed (A) and which are variable (B). (Hint: To prepare for the last question, where you will be asked to compute the total and per unit costs, write the headings for "Fixed and "Variable" on a sheet of paper. Then, as you classify each cost, enter the amount under the appropriate heading. Add the amounts in each column to obtain the total fixed and variable costs. You will have the amounts needed to answer the last question.] 1. Leather for upper part of shoe, $2.50 per shoe 2. Rubber for sole of shoe, $6 per shoe 3. Rent on manufacturing facility building. 5188,000 annually 4. Sales manager salary, $127.000 annually 5. Worker who operates machine that puts shoe together, $2 per shoe 6. Shoe laces, $1.80 per shoe 7. Worker who puts shoes in shoe box, $0.20 per shoe 8. Insurance on manufacturing facility, $23,000 annually 9. Water and utilities, $22,000 per month consistently 10. Depreciation on manufacturing equipment, $18,000 each month 11. Already contracted advertising on television, $1,800,000 annually 12. Salos commission paid to salespeople based on 5% of sales at Spo per shoe 13. Office supplies, usually approximately $3,000 per month 14. Paper for copier in executive offices, usually about $1,200 per month 15. Glue used in shoe, approximately $0.18 per shoe 16. Company jet lease, $14,000 per month

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