Ceres valley meat company produces one of the best sausages in the country. The company's accountant used the account classification method to compile the following

1.inspection of several I voices from meat packers indicated that meat costs the company 20 dollars per kilo of sausage produced.

2.depreciation schedules reveal that monthly depreciation on building and equipment is 40000.

3.wage records showed that the payment for production employees costs 9.60 per kilo.

4.payroll records showed that supervisors salaries total 16000 per month.

5.electricity bill revealed that the company incurs electricity cost of 8000 per month plus 0.40 per kilo

Required

A. classify each cost item as variable, fixed or semi variable (mixed)

B. cost formula to express the cost behavior of the firms production cost. Use the forms Y=a+bx, where Y denotes production cost and X denotes quantity of sausages produced.

Direct material used 150000

Selling costs 5000

Indirect labour 7000

Administrative cost 10000

Depreciation on equipment 70000

Direct labour 40000

Factory utility cost 20000

Indirect materials 45000

1. Calculate prime cost

2.conversion cost

3.production cost

4.period cost

5.non manufacturing cost