Shannon Valley Meat Company produces one of the best sausage products in Pennsylvania. The company's controller compiled the following information by analyzing the accounting records:

1. Meat costs the company $2.80 per pound of sausage produced.

2. Compensation of production employees is $2.00 per pound of sausage produced.

3. Supervisory salaries total $19,000 per month.

4. The company incurs utility costs of $8,000 per month plus $0.50 per pound of sausage produced.

5. Insurance and property taxes average $7,000 per month.

Required:

Type=A

1.  Classify each cost as variable, fixed, or semi variable.

2. Write a cost formula to express the cost behavior of the firm's production costs.  (Use the form Y = a + b X, where X denotes the quantity of sausage produced.)