Water Technology, Inc. incurred the following costs during 20x1. The company sold all of its products manufactured during the year.

During 20x1, the company operated at about half of its capacity, due to a slowdown in the economy.
Prospects for 20x2 are slightly better. Jared Lowes, the marketing manager, forecasts a 20 percent growth in sales over the 20x1 level.
Required: Categorize each of the costs listed above as to whether it is most likely variable or fixed.
Forecast the 20x2 cost amount for each of the cost items listed above.

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Direct material $3,000,000 Direct labor...... 2,200,000 Manufacturing overhead: Utilities (primarily electricity) 140,000 Depreciation on plant and equipment 230,000 Insurance 160,000 Supervisory salaries. 300,000 Property taxes 210,000 Selling costs: Advertising 195,000 Sales commissions 90,000 Administrative costs: Salaries of top management and staff. 372,000 Office supplies......... 40,000 Depreciation on building and equipment 80,000