In December 201X Heaven followed her plans: she dropped out of college, created a business plan, and incorporated as Heavenly Creations. The bakery is in honor of her mom, Cleo, who passed away earlier in the year. Heaven planned to open her business on January 2, 2016. She would use the $50,000 inheritance from her mom as start-up capital and receive a minimum salary of $500 per month for the first year of business. Uncle David, a marketing executive with a national bank, agreed to provide her with marketing support pro-bono.

Heaven found the perfect location for her business. A take-out restaurant on the busy intersection of Jamaica and Hillside Avenues in Queens, NY, became available after a bitter divorce between the owners. The landlord was impressed with Heavens vision and agreed to pay for all renovations and charge her $600 per month for rent. Heaven will be able to use baking pans and other kitchen utensils left by the previous tenant.

Required: Heaven needs your help in classifying the various costs. In order to manage these costs, she wants them identified using the information below. She asked that you use Table 2 for your answers.Behavior (fixed or variable) ..Traceability (direct or indirect) ..Financial reporting (product or period) If product cost, identify which items are direct materials, direct labor or manufacturing overhead.

TABLE 2: COST CLASSIFICATION CHART
	BEHAVIOR		TRACEABILITY		REPORTING	PRODUCT CLASSIFICATION			REPORTING
	Fixed	Variable	Direct	Indirect	Product	DM	DL	MOH	Period
Oven
Cash Register
Rent
Utilities
Cell Phone
Flour
Sugar
Baking Soda
Butter
Raisins