Required P2-17 Cost Identification Frieda Bronkowski has invented a new type of flyswatter. Af- ter giving the matter much thought, Frieda has decided to quit her $3,000 per month job with a computer firm and produce and sell the flyswatters full time. Frieda will rent a garage that will be used as a production plant. The rent will be $150 per month. Frieda will rent production equipment at a cost of $500 per month. The cost of materials for each flyswatter will be $0.30. Frieda will hire workers to pro- duce the flyswatters. They will be paid $0.50 for each completed unit. Frieda will rent a room in the house next door for use as her sales office. The rent will be $75 per month. She has arranged for the telephone company to attach a recording device to her home phone te get off-hours messages from customers. The device will increase her monthly phone bill by $20. In addition, she will be charged $0.50 for each message recorded on the device. Frieda has some money in savings that is earning interest of $1,000 per year. These sav ings will be withdrawn and used for about a year to get the business going. To sell her flyswatters, Frieda will advertise heavily in the local area. Advertising costs will be $400 per month. In addition, Frieda will pay a sales commission of $0.10 for each flyswatter sold. For the time being, Frieda does not intend to draw any salary from the new company Frieda will continue to live in the house she bought several years ago for $150,000. 1. Prepare an answer sheet with the following column headings: Product Cost Name of the Cost Variable Cost Fixed Cost Direct Materials Direct Labor Manufacturing Overhead Period (selling and administrative) Cost Opportunity Cost Sunk Cost List the different costs associated with the new company down the extreme left columr (under Name of the Cost). Then place an X under each heading that helps to describe the type of cost involved. There may be X's under several column headings for a single cost. (That is, a cost may be a fixed cost, a period cost, and a sunk cost; you would place an X under each of these column headings opposite the cost.) 2. All of the costs you have listed above, except one, would be differential costs betweer the alternatives of Frieda producing flyswatters or staying with the computer firm Which cost is not differential? Explain.