For this case study, read the case study and provide answers to the following questions on the attached answer sheet

$1.$ Categorize the costs detailed in the case, such as sunk, opportunity, variable, direct materials, direct labor, and overhead.

$2.$ Based on relevant costing principles, which are relevant for each of the respective projects?

$3.$ Is there any additional information you need from Adam before you can help him decide whether he should complete both projects? If so$,$ please specify.

$4.$ Having reviewed the three options for reducing Adam$$s sanding time on the imminent opportunities, which do you think is the best option? Provide calculations and reasoned explanations. Do you think this would also be the best option longer term? Explain.

$5.$ How much would it cost to make a small cutting board? How much for a medium one? Use normal costing rather than relevant costing, if different, under all scenarios. For example, Adam does all the sanding or avails of one of the three options outlined in the case. Based on your answer and the price Suzie is willing to pay, what would his profit margin be on each size of cutting board if he does all the work himself, and what does this translate into on an hourly basis?

$6.$ Should Adam commit to making the headboard for his friend, and what qualitative factors should he consider in making a decision? If he does commit to making the headboard, how much should he charge for it$?$

$7.$ What strategy should Adam pursue$$differentiation or cost$?$

$8.$ What type of costing system $($process costing, job costing, and so on$)$ might be appropriate for Adam? Explain.

$9.$ Based on the information provided, your answers to the previous questions and any other analysis that you have undertaken, do you think that this will be a lucrative endeavor for Adam in retirement. Support your assertion with computations, and so on$.$