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Heaven Burger produces and sells 10,000 hamburgers during December for $1.50 each. The restaurant employs a cook, waiter, and owner, Peter. All cooks and
Heaven Burger produces and sells 10,000 hamburgers during December for $1.50 each. The restaurant employs a cook, waiter, and owner, Peter. All cooks and waiters are part-time employees. A janitor is hired to clean the building weekly, and the owner schedules work, opens buildings, counts cash, creates advertisements, and is responsible for hiring and laying off employees. The following expenses were incurred during December as follows: a. Burger meat b. Lettuce c. Tomato d. Raisin e. Other ingredients f. Chef wages $ 1600 300 250 300 20 2550 g. Waiter wages h. Owner's salary i. Telephone j. Electricity k. Depreciation of cooking utensil 1. Depreciation of cash register m. Advertisements n. Rent o. Cleaning supplies p. Cleaning staff wages 2032 2000 500 500 200 50 100 800 50 120 Required: 1. Classify, compute, and please explain the result: a. Product cost and period cost (5 points) b. Direct cost and indirect cost (5 points) c. Prime costs and conversion costs (5 points) 2. "All of the above costs are fixed costs that cannot change, and some of them are components of product costs." Please explain your argument for that statement! (5 points) 3. What is cost behavior? Please classify the costs above into the appropriate cost behavior and give your explanation! (15 points)
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