Leaf Peeper's Ice Cream, Inc. (LPIC) is a maker of ice cream with seasonally-inspired flavors. Their sales volume is larger than the owners could have imagined, and each of the past three years they have grown. Despite their sales success, profits are not as high as expected. Cal Kidd and B.J. Bryson, owners and managers of LPIC, have released a RFP (request for proposal) to hear pitches for managerial accounting services. Explain to management what the difference is between sales (revenues) and profits (net income). The first thing you decide to do when putting together your pitch is categorize the costs incurred by LPIC. Variable Administrative Selling Manufacturing Manufacturing Indirect Fixed Direct yes yes yes yes Freight-out Cream used to make ice cream Sugar used to make ice cream Factory machine operator wages Food grade oil for machines* Factory rent Factory utilities Vanilla used to make ice cream Office building occupancy Advertising (general) Toppings to make ice cream Cartons to hold ice cream Finished goods refrigeration Office staff salary Sales commissions