Cost Classification: The Lee's have provided you with the following costs and relevant information that are assumed for year $20$XY$.$

A$.$ Classify each of the costs $($a$.$ through j$.)$ below under C$.$ as a variable cost or a fixed cost.

B$.$ Explain the importance of distinguishing between variable and fixed costs.

C$.$ Prepare a budgeted income statement, assuming $600$ units to be produced and sold, a per unit selling price of $$85,$ an income tax rate of $28\%$ and the following information.

a$.$ Cost of goods sold of $$35$ per unit

b$.$ Labor $=$$$\frac{400}{?}$ month

One part$-$time employee will be hired to take care of packaging and shipping. This employee will be paid $$10$ per hour. He or she is estimated to work $40$ hours total per month.

c$.$ Advertising fees $=$$$3,000$

d$.$ Bank fees $=$$$200$

e$.$ Phone$/$internet $=$$$150$ per month

f$.$ Shipping $=$$$3$ per unit

g$.$ Utilities $=$$$100$ per month

h$.$ Office Supplies $=$$$900$

i$.$ Conference Exhibitor Fee $=$$$3000$

j$.$ Travel Expenses for Conference $($e$.$g$.$ airfare, meals, taxi$)=$$$1200$