Water Technology, Inc. incurred the following costs during 20x1. The company sold all of its products manufactured during the year.

Direct material	$	4,000,000
Direct labor		2,400,000
Manufacturing overhead:
Utilities (primarily electricity)		140,000
Depreciation on plant and equipment		230,000
Insurance		160,000
Supervisory salaries		400,000
Property taxes		210,000
Selling costs:
Advertising		185,000
Sales commissions		70,000
Administrative costs:
Salaries of top management and staff		374,000
Office supplies		40,000
Depreciation on building and equipment		75,000

During 20x1, the company operated at about half of its capacity, due to a slowdown in the economy. Prospects for 20x2 are slightly better. Jared Lowes, the marketing manager, forecasts a 20 percent growth in sales over the 20x1 level.

Required:

Categorize each of the costs listed below as to whether it is most likely variable or fixed. Forecast the 20x2 cost amount for each of the cost items listed.

	Variable or Fixed	20x2 Forecast
Direct material
Direct labor
Manufacturing overhead:
Utilities (primarily electricity)
Depreciation on plant and equipment
Insurance
Supervisory salaries
Property taxes
Selling costs:
Advertising
Sales commissions
Administrative costs:
Salaries of top management and staff
Office supplies
Depreciation on building and equipment