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Diana and Donna, twin sisters, loved to bake and sold their pastries at the local farmers ' market, concentrating their efforts on producing and selling
Diana and Donna, twin sisters, loved to bake and sold their pastries at the local farmers ' market, concentrating their efforts on producing and selling mini scones using their grandmother's recipe. Their scones were quite popular prompting the sister to seriously consider converting this hobby to a business. 1. Once the sister made the decision to start a business, they moved quickly to sign an annual lease that would provide them with the space they would need. Diana and Donna decided to sell the mini scones in boxes containing a dozen scones and found a vendor who would sell them good quality boxes at a price of \$0.75 per box. They also arranged for advertising and signed an annual contract that provides weekly advertising. The advertising contract required a payment of $125 per month for a total annual cost of $1,500 a year. The sisters estimated that cost of the raw materials (flour, sugar, butter, etc.) would be \$5.35 per box. Required: Please review each of the following costs and classify it as one of the following (fixed, variable, mixed or step). a. The rent on the space would most likely be b. Flour used to make the scones would most likely be c. The boxes used to package the scones would most likely be d. The advertising would most likely be
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