10 Mark Question 2 to i manufacturing plant in order to have room for expansion when needed. Since the co had no immediate need for the extra space, it rented out the building to another comp Several years ago, Wallace Company purchased a small building adjacent for a rental revenue of $35,000 per year. The renter's lease will expire soon, and rather renewing the lease, Wallace Company has decided to use the building itself to man a new product. anufacture Direct materials cost for the new product will total $50 per unit. It will be necessary to hir a supervisor to oversee production. His salary will be S3,000 per month. Workers will be hired to manufacture the new product, with direct labour cost amounting to S22 per uni Manufacturing operations will occupy all of the building space, so it will be necessary to rest space to a warehouse nearby to store finished units of product. The rental cost will be $1,500 per month. In addition, the company will need to rent equipment for use in producing the new product: the rental cost will be S2,200 per month. The company will continge lo depreciate the building on a straight line basis, as in part years. Depreciation on the building is $7,000 per year Advertising costs for the new product will total S28,000 per year. Costs of shipping the sa product to customers will be $7 per unit. Electrical costs of operating machines will k 1 be S14 per unit. le ve l To have funds to purchase materials, meet payrolls, and so forth, the company will k nv, liquidate some temporary investments. These investments are yielding a retura per year Required: Complete the chart below by placing an "" under each heading that helps to cost involved. to ident There can be "X's" placed under more than one heading for a single cost. eplaced cost, eg, a cost i be a sunk cost, an overhead cost and a product cost; there wou each of these headings opposite the cost. ld