Question 3

(answer the below questions on line paper provided.)

1. Indicate whether the following will be classified as. sunk cost, incremental cost; variable cost; fixed cost; semi-variable cost; semi-fixed cost; controllable cost; non-controllable cost; opportunity cost.

1. An organization have three mechanics who are responsible for repairing the haulage trucks. The mechanics are paid a base salary plus an amount per truck repaired. This makes the total cost of the mechanics a ____________________________________
2. Tour guides at Gabot National Parks are paid a flat salary, for guiding a maximum of ten tourists. The national parks will require to employ more tour guides for more tourists. This means that the total tour guides cost would now be a ____________________________.
3. UYI rents compressors and charges customers per day. The management wishes to add jackhammers to their rental assets starting June 2022. The jackhammer cost is a ___________.
4. Ware house is rented BWP 12,000 per month ___________.
5. The cost that a banking corporation spent last year to investigate the site for a new office. The organization is now deciding whether to go forward with the project or not. The cost for investigation is ____________

[5 marks]

2. Jabro limited manufactures and sells telephone receivers. The following are some of the costs that incurs during the production process.

Period	January	February	March	April
Number of Units	7,500	6,000	5,100	5,500
	BWP	BWP	BWP	BWP
Materials	47,625	38,100	32,385	34,925
Salaries and Wages	50,200	50,200	43,700	43,700
Power	7,875	7,200	6,795	6,975
Rent	12,500	12,500	12,500	12,500
Engineering	25,250	20,450	17,570	18,850

Required:

Classify the above costs Jabro incurs in its production process based on their behavior and explain your answer. (Show your workings) [10 marks]