Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis. Bill will rent a garage for $300 per month for production purposes. Utilities will cost $40 per month. Bill has already taken an industrial design course at the local community college to helo prepare for this venture. The course cost $300. Bill will rent production equipment at a monthly cost of $800. He estimates the material cost per unit will be $5, and the labor cost will be $3. He will hire workers and spend his time promoting the product. To do this he will quit his job which pays $3,000 per month. Advertising and promotion will cost $900 per month.

Required: Complete the chart by placing an "X" under each heading that helos to identify the cost involved. There can be "Xs" placed under more than one heading for a simple cost., e.g., a cost might be a sunk cost, an overhead cost and a product cost; there would be an "X" placed under each of these headings opposite the cost.

Costs of: Opportunity Sunk Variable Fized MOH Product Selling Differential

Garage rent

Utilities

Cost of the industrial design course

Equipment rented

Material cost

Labor cost

Present salary

Advertising

Answer rating: 100% (QA)

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