1. The classification of fixed, variable, and semivariable costs A Aa Complete the following sentences by inserting the correct terms Over the short run, operating costs that vary directiy with sales are called long run, all costs are costs. However, over the Consider the cost structure of Wellington Industries: Review the traditional format income statement for Wellington Industries that follows, and dassify the indicated costs as being fixed, semivariable, or variable in nature. Fixed Cost Semivariable Cost Variable Cost $7,546,235 2,414,7950 2,112,946 00 00 00 00 Wellington Industries Income Statement for the Year Ending June 30 Net sales Cost of goods sold Direct materials Direct labor Overhead expenses: Depreciation on manufacturing equipment Water utility expense Total cost of goods sold Gross profit Operating expenses: Sales commission expense Lease for factory space Total operating expenses Eamings before interest and taxes (EBIT) Interest expense Earings before taxes (EBT) Taxes (35%) Net income Preferred stock dividends Earnings available to common shareholders 301,849 150,925 4,980,515 2,565,720 226,3870 528 236 754,623 1,811,097 52.774 1,358,323 475,413 0 00 00 0 00 00 000 00 S882 910 196 202 $686.708