Cycle Business manufactures and sells road and mountain bikes through a network of retail outlets in western Canada. Below is a partial list of expense items incurred in the most recent month (November), when 1,140 bicycles were manufactured, shipped, and sold. There was no beginning or ending work in process or finished goods inventory in November:

Item	October			November
Units produced and sold		1,040			1,140
Sales	$	1,040,000		$	1,140,000
Leather used for the bicycle seats		35,360			38,760
Production managers salary		6,700			6,700
Life insurance for the company president		270			270
Electricity used in the production facilities*		5,370			5,870
Sales commissions		46,400			51,680
Internet advertising		1,200			1,200
Employee benefits for the production workers		29,120			31,920
Property taxes on the production facilities		1,700			1,700
Shipping costs		46,400			51,680
Salary of the chief financial officer		11,400			11,400
*Each month, regardless of how much electricity is used, Cycle Business pays a $170 base charge to the utilities company.
Employee benefits total 20% of the wages paid to production workers, who on average earn $20 per hour. Each bicycle requires 7 hours of direct labour.

Required:

1.	With respect to the partial list of November expenses:

a.		Use the Type column to label each item as a Manufacturing, Administrative, or Selling cost.
b.		For those items you labeled as a Manufacturing cost,
	i.	Use the Behaviour column to label each item as variable or fixed manufacturing costs.
	ii.	Use the Direct/Indirect column to label each item as a direct or indirect cost.

Item	Type	Behaviour	Direct/Indirect
Leather used for bicycle seats
Production managers salary
life insurance for the companys president
electricity used in production facilities
sales commissions
internet advertising
employee benefits for the production workers
property taxes on the production facilities
shipping costs
salary of the chief financial officer

2.

Assume that 1,340 bicycles will be manufactured and sold in December. For the items you classified as manufacturing costs in requirement 1, estimate the cost for December. Assume that there will be no change in unit costs for any direct materials, hourly wages will remain the same, and employee benefits will continue at 20% of wages.