1. Fixed and variable cost classification Aa Aa Complete the following sentences by inserting the correct terms Over the short run, operating costs that do not vary directly with sales are called over the long run, all costs are costs. However, Consider the cost structure of Wellington Industries: Review the traditional format income statement for Wellington Industries that follows, and classify the indicated costs as being fixed, semivariable, or variable in nature Wellington Industries Income Statement for the Year Ending December 31 Fixed Semivariable Variable Cost Cost Cost Net sales $11,525,837 Cost of goods sold Direct materials Direct labor Overhead expenses: 2,996,718 2,535,684 461,033 O 230,517 O Rent expense Water utility expense Total cost of goods sold Gross profit Operating expenses: 6,223,952 5,301,885 Shipping and delivery expenses Lease for factory space 461,033 691,550 Total operating expenses Earnings before interest and taxes (EBIT) 1,152,583 4,149,302 806,809 Interest expense