Cost Concepts and Classifications Jamal has a garage that was constructed at a cost of $8,000 several years ago. Jamal decided to produce and sell surfboards in his spare time. Accordingly he can use the garage for construction purposes. The garage will be depreciated over a 20-year life. Jamal has determined that each surfboard will require $60 in wood. He will hire students to do most of the work and pay them $70 for each surfboard completed. He will rent tools at a cost of $400 per month. Jamal has drawn money out of savings to provide the capital needed to get the operation going. The savings were earning interest at 6 percent annually. An advertising agency will handle advertising at a cost of $200 per month. Jamal will hire students to sell the surfboard and pay a commission of $40 per board.

Required: From the foregoing information/above text, identify all the examples you can of the following types of costs (a single item may be identified as more than one type of cost)-use a table:

Cost Item Your Answer Variable cost ( 4 marks) Fixed cost ( 4 marks) Selling or administrative cost ( 4 marks) Product cost ( 4 marks) Manufacturing overhead cost ( 4 marks) Sunk cost ( 4 marks) Opportunity cost ( 4 marks) Differential cost (between the alternatives of producing or not producing surfboard) ( 2 marks)