Question 3 - Cost classifications by cost behaviour Outer Banks Shirt Shop manufactures T-shirts and decorates them with customised designs for retail sale on the premises. Several costs incurred by the company are listed below. For each cost listed below, indicate which of the following classifications best describes the cost. More than one clasification may apply to the same cost item.

Cost classifications: (a) variable (b) fixed c) manufacturing (i) direct labour (ii) direct material (iii) manufacturing overhead (d) selling & distribution Costs:

1 Cost of a new sign in front of the retail T-shirt shop.

2 Wages of the employee who repairs the firm's sewing machines.

3 Cost of fabric used in the T-shirts.

4 Wages of the shirtmakers.

5 Cost of electricity used in the sewing department.

6 Wages of the T-shirt designers and painters.

7 Wages of the sales personnel.

8 Depreciation on the sewing machines.

9 Rent on the building. Part of the building's first floor is used to make and paint T-shirts. Part of it is used for a retail sales shop. The second floor is Used for administrative offices and storage of raw material and finished goods.

10 Cost of daily advertisements in the local media.

11 Wages of the designers who experiment with new fabrics, paints and T-shirt designs.

12 Cost of hiring a pilot to fly along the beach pulling a banner advertising the shop.

13 Salary of the owner's secretary.

14 Cost of repairing the gas furnace.

15 Cost of insurance for the production employees