McPeter's Yum-Yum Two at coupies, the Macks and the Petersons, have been neighbors for over 20 years. They discovered the four of them have exceptional baking skills. They in respectable, prestigious bakeries and restaurants. have all traveled extensively, taken baking classes, and have each worked the vears they have united their baking skills and baking passions and have taken advantage of their It did not take long before very opportunity to distribute their baked good to family and friends. cateesharing of baked goods developed into orders. The Macks and Petersons found themselves in the catering business. That is, they were quite often hired to cater the dessert section of menus for wedding, parties, banquets, etc. About three year ago, the McPeter's Yum-Yum Company was legally formed and licensed to do business. Demand grew such that their kitchens were deemed too small for business. They relocated to a much larger facility and have a small staff of workers. The Macks and Petersons expanded their operations to include private catering as well as placement in grocery stores. Consequently, they recently retained the services of Joice Harllann, a CPA, to assist them in managing the financial affairs of the company. The Macks and Petersons see a profitable future for McPeter's Yum-Yum Company. They have asked Joice to focus specifically on growth and profitability Joice has determined that there is a need for a lot of cost analysis, especially regarding the determination of the cost of baking their specialty, cookies. Her goal is to determine a product costing system that can be used for pricing decisions and product-line planning and budgeting. She has asked you, one of the administrative staff persons for McPeters Yum-Yum, to provide basic information that would serve as a starting point. You provided Exhibit 1 showing actual costs and revenue data for the month of July 2017. After receiving the information, Joice wants you to further (1) classify each of the expenses as either variable or fixed and (2) classify each expense as a product or period costs. She asked that you justify the classification you asign to each. Write a memo to Joice in response to her request. Be sure to present your responses clearly. You may present exhibits to accompany your memo