pdt-Adabe Reade ew Window Help EXERCISE I-9 Cost Classification [LOI, LO2, LO3, LO7 Several years ago, Medex Company purchased a small building adjacent to its manufacturing plant in order to have room for expansion when needed. Since the company had no immediate need for the extra space. the building was rented out to another company for rental revenue of $40,000 per ycar. The renter's lease will expire next month, and rather than renewing the lease, Medex Company has decided to use the build- ing itself to manufacture a new product. Direct materials cost for the new product will total $40 per unit. It will be necessary to hire a supervisoe to oversee production. Her salary will be $2.500 per month. Workers will be hired to manufacture the new prod- uct, with direct labor cost amounting to S18 per unit. Manufacturing operations will occupy space, so it will be necessary to reat space in a warchouse nearby in o rental cost will be the new product: the rental cost will be $3,000 per month. The company will continue to depreciale ing on a straight-line basis, as in past years. Depreciation on the huilding is S10000 per year all of the beuilding in a warchouse nearby in order to store finished units of product. The 1,000 per month. In addition, the company will need to rent equipment for use in pr Advertising costs for the new product will total $50,000 per year. Costs of shipping the new product to customers will he $10 per unit. Electrical costs of operating machines will be $2 per unit To have funds to purchase materials, meet payrolls, and so forth, the comypay will have so liquidate some lemporary investments. These investments are presently yielding a return of S6.(0X0 per year Required Picpare an answer sheet with the following coluimn beadings Product Cost Name of the Variable Fixed Direct Cost Materials Direct Manufacturing Period (Selling and Opportunity Sunk Labor Overhead Administrative) Cost Cost Cost