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Thankyou, stay safe Sandra Freestone has developed a new product that she has decided to produce and market. To proceed with this project, Sandra will
Thankyou, stay safe
Sandra Freestone has developed a new product that she has decided to produce and market. To proceed with this project, Sandra will quit her present job, which pays $3,000 a month. Sandra has found a small building to rent for $500 a month that will house the production facilities. One major piece of equipment that will be used to manufacture the product will be rented for $100 a month. Sandra purchased all of the other needed tools five years ago for $1,500. Material costs to make the product are estimated at $3 per unit. Monthly advertising costs for the product are estimated at $600. Required: Complete the chart below by placing an "X" under cach heading that helps to identify the cost involved. There can be "X"s placed under more than one heading for a single cost; c.g., a cost might be a sunk cost, an overhead cost, and a product cost. There would be an "X" placed under each of these headings opposite the cost. Oppor- tunity Cost Sunk Var Costiable Cost Fixed Prime Conver- Cost Cost sion Cost Manu Manu facturing Cost Period Cost Difer- ential Cost Building Teat Original cost of tools Equipment rented Material cost Present AdvertisingStep by Step Solution
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