Problem 2-15 Cost Classification.

Robyn Blake has invented a new type of fly swatter.

Problem 2-15 Cost Classification (LO1, LO2, LOS, LO7) Robyn Blake has invented a new type of fly swatter. After thinking it through carefully, she has decided to quit her $5,000 per month job with a start-up tech company to produce and sell the fly swatters full time Robyn will rent a garage that will be used as a production plant. The rent will be $300 per month. She will also rent production equipment at a cost of $1.000 per month. The cost of materials for each fly swatter will be $0.60 Robyn will hire workers to produce the fly swatters. They will be paid $1.00 for each completed unit . Robyn will rent a room in the house next door for use as her sales office. The rent will be $150 per month. She will add extended voicemail to her mobile plan to ensure she gets after-hours messages from customers. The feature will cost $5 per month Robyn has savings that are earning her interest of $2,000 per year. She plans to withdraw all of her savings to use in getting the business started for the first year. Robyn plans to advertise her product in numerous trade publications at a cost of $400 per month. She plans to pay her sales staff a commission of $0.20 for each fly swatter sold, She does not plan to take any salary from the new company for the first year. Robyn has already paid the legal fees required to Incorporate her new company at a total cost of $1,000. Required: 1. Listed below are different costs associated with the new product decision. Choose Yes or No under each heading that helps to describe the type of cost involved Required: 1. Listed below are different costs associated with the new product decision Choose Yes or No under each heading that helps to describe the type of cost involved. Variable Cost Period (Selling and Admin.) Opportun Cost Cost Fixed Cost Product Cost Direct Manufacturing Labour Overhead Direct Materials Name of the Cost $5,000 salary at tech company foregone Garage rental, $300 per month Equipment rental, $1,000 per month Material cost. $0.60 per unit Labour cost $1.00 per unit Room rental for sales office, $150 per month Voicemail plan for cell phono, $5 per month Foregone interest on savings account, $2,000 per year Advertising, $400 per month Sales staff commission, $0.20 per unit Legal foes to incorporate, $1,000 Variable Cost Sunk Cost Period (Selling and Admin.) Cost Opportunity Cost Fixed Cost Product Cost Direct Manufacturing Labour Overhead Direct Materials rear Room rental for sales office, $150 per month Voicemail plan for cell phone, $5 per month Foregone interest on savings account, $2,000 per year Advertising, $400 per month Sales staff commission, $0.20 per unit Legal fees to incorporate, $1,000 2. Which of the following item is not a differential cost? O Labour cost O Advertising O Legal fees O Garage rental