Meat Company produces one of the best sausage products in Damansara Utama. The companys controller used the account- classification method to compile the following information.

Required:

a) Briefly explain fixed cost and variable cost?

b) classify each cost item as variable, fixed or mixed cost.

1. Depreciation schedules revealed that monthly depreciation on buildings and equipment is RM19,000.
2. Inspection of several invoices from meat packers indicated that meat costs the company RM1.10 per sausage produced.
3. Utility bills revealed that the company incurs utility costs of RM4,000 per month plus RM0.20 per sausage produced