Cost classification The L.A. Dress Shop manufactures dresses and decorates LO!,3 them with custom designs for retail sales on the premises. The shop sold 5000 dresses last month. Costs incurred during the last month include the following:

Apportion the rent into different categories based on the following facts. Half of the building's first floor is used for administrative offices. The other half of it is used for a retail sales shop. The second floor is used for making dresses and stor¬ ing of raw material.
REQUIRED

(a) Classify the above costs into one of the following categories: direct materials costs, direct labor costs, indirect manufacturing (support) costs, distribution costs, selling costs, marketing costs, research and development costs, gen¬ eral and administrative costs. What is the total cost for each category?

(b)Classify the costs as unit-related, batch-related, product-sustaining, or busi¬ ness-sustaining costs. What is the total cost for each category?
(LO 1, 3)

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Cost of fabric used in dresses Wages of dressmakers $60,000 5,000 Wages of dress designers Wages of sales personnel 4,000 1,000 Wages of designers who experiment with new fabrics and dress designs 3,000 Wages of the employee who repairs the shop's pattern and sewing machines 2,000 Salary of the owner's assistant 1,200 Cost of the new sign displayed in front of the retail shop 400 Cost of electricity used in the pattern department 200 Depreciation on pattern machines and sewing machines 10,000 Cost of advertisements in local media 800 Cost of hiring a plane and a pilot to fly along the beach pulling a banner advertising the shop 1,400 Cost of insurance for the production employees 2,000 Rent for the building 6,000