Assume that your team is going to form a company that will manufacture chocolate chip cookies. The team is responsible for preparing a list of all product components and costs necessary to manufacture this product.

Required:

1. The team should discuss and then write a brief description of the definitions of variable, fixed, and mixed costs. All team members should agree with and understand the definitions.

2. After preparing a list of all product components and costs necessary to manufacture your cookies, identify each of the product costs as direct materials, direct labour, or factory overhead. Then identify each of those costs as variable, fixed, or mixed.