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

Direct material	$ 4,000,000
Direct labor	2,200,000
Manufacturing overhead:
Utilities (primarily electricity)	130,000
Depreciation on plant and equipment	210,000
Insurance	160,000
Supervisory salaries	300,000
Property taxes	210,000
Selling costs:
Advertising	185,000
Sales commissions	90,000
Administrative costs:
Salaries of top management and staff	372,000
Office supplies	40,000
Depreciation on building and equipment	65,000

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.

\begin{tabular}{|l|l|l|} \hline & VariableorFixed & 202Forecast \\ \hline Direct material & & \\ \hline Direct labor & & \\ \hline Manufacturing overhead: & & \\ \hline Utilities (primarily electricity) & & \\ \hline Depreciation on plant and equipment & & \\ \hline Insurance & & \\ \hline Supervisory salaries & & \\ \hline Property taxes & & \\ \hline Selling costs: & & \\ \hline Advertising & & \\ \hline Sales commissions & & \\ \hline Administrative costs: & & \\ \hline Salaries of top management and staff & & \\ \hline Office supplies & & \\ \hline Depreciation on building and equipment & & \\ \hline \end{tabular}