Direct materials cost for the new product will total $$80$ per unit. To have a place to store its finished goods, the company will rent a small warehouse for $$500$ per month. In addition, the company must rent equipment for $$4\mathrm{.}000$ per month to produce the new product. Direct laborers will be hired and paid $$60$ per unit to manufacture the new product. As in prior years, the space in the annex will continue to be depreciated at $$8\mathrm{.}000$ per year.

The annual advertising cost for the new product will be $$50,000.$ A supervisor will be hired and paid $$3,500$ per month to oversee production. Electricity for operating machines will be $$1\mathrm{.}20$ per unit. The cost of shipping the new product to cestomers will be $$9$ per unit.

To provide funds to purchase materials, meet payrolls, and so forth, the company will have to liquidate some temporary investments. These investments are presently yielding a return of $$3,000$ per year.

Required:

Using the table shown below, describe each of the costs, associated with the new product decision in four ways. In terms of cost classifications for predicting cost behavior $($column $2),$ indicate whether the cost is fixed or variable. With respect to cost classifications for manufacturers $($column $3),$ if the item is a manufacturing cost, indicate whether it is direct materials, direct labor, or manufacturing overhead. If it is a nonmanufacturing cost, then select "none" as your answer. With respect to cost classifications for preparing financial statements $($column $4),$ indicate whether the item is a product cost or period cost. Finally, in terms of cost classifications for decision making $($column $5),$ identify any items that are sunk costs or opportunity costs. If you identify an item as an opportunity cost, then select "none" as your answer in columns $2-4.$

$\backslash$table$[[$Name of the Cost,$\backslash$table$[[$Cost Classifications for$],[$Predicting Cost Behavior$]],\backslash$table$[[$Cost Classifications for$],[$Manufacturers$]],\backslash$table$[[$Cost Classifications for$],[$Preparing Financial$],[$Statements$]],\backslash$table$[[$Cost Classifications for$],[$Decision Making$]]],[$Rental revenue forgone, $$30,000$ per year$],[$Direct materials cost, $$80$ per unit$],[$Rental cost of warehouse, $$500$ per month$],[$Rental cost of equipment, $$4,000$ per month$],[$Direct labor cost, $$60$ per unit$],[$Depreciation of the annex $5$ pace, $$8,000$ per year$],[$Advertising cost$,$ $$50,000$ per year$],[$Supervisor$\text{'}$s salany: $$3,500$ per month.$],[$Electricty for machines, $$1\mathrm{.}20$ per unit$],[$Shipping cost$,$ s$9$ per unit$],[$Retum earned on investments, $$3,000$ peryear,,,,$]]$