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worlogong Group Ltd of New South Wales Australia accredits factory building 10 years ago For several years the company rentgg out a small annex attached to the rear of the building for 530000 per vear the renters will expire soon ond e renewing the lease, the company has decided to use the annex to manufacture a new product Direct materials cost for the new product will total 580 per unit. To have a place to store its finished goods, the company will renta small warehouse for $500 per month in addition, the company must lent equipment for $4,000 per month to produce the new product Direct laborers will be hired and paid 560 per unit to manufacture the new product Asin prior years, the space in the annex will continue to be depreciated at $8,000 per year The annual advertising cost for the new product will be $50.000 A supervisor will be hired and paid $3.500 per month to oversee production Electricity for operating machines will be $120 per unit. The cost of shipping the new product to customers will be 59 per unit To provide funds to purchase materials meet payrolls, and so forth the company will have to liquide some temporary investments These investments are presently yielding a return of $3,000 per year Required: Using the table shown below, describe each of the costs associated with the new product decision in four ways in terms of cost classifications for predicting cost behavior (column 2), indicate whether the cost is foed or vanable with respect to cost classifications for manufacturers (column 3), if the item is a manufacturing cost, indicate whether it is direct materials, direct labor, or manufacturing overhead if it is a nonmanufacturing cost, then select "none" as your answer. With respect to cost classifications for preparing financial statements (column 4), indicate whether the item is a product cost of period cost. Finally, in terms of cost classifications for decision making (column 5), identify any items that are sunk costs of opportunity costs. If you identify an item as an opportunity cost, then select "none" as your answer in columns 2-4 Cost Classifications for: Preparing Manufacturers Financial Statements Predicting Cost Rehavior Cost Item Decision Making Rental revenue forgone, $30.000 per year Direct materials cost, $80 per und Rental cost of warehouse. 5500 per month Rental cost of equipment, $4,000 per month Direct labor cost, 560 per unit Depreciation of the annex space, $8,000 per year Advertising cost, $50,000 per year Supervisor's salary, $3,500 per month Electricity for machines, 51.20 per unit Shipping cost, 99 per unit Returneamed on investments, $3,000 per year

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