Question 4:

a) Break Even analysis differentiates between two types of costs: variable and fixed. What is the difference between the two types of costs?

b) Categorize the following costs as variable or fixed.

Cost	Variable	Fixed
The cost of goods sold
A manager's salary
A salesperson's commission based salary
The investment in equipment required to produce the goods to be sold
Facilities lease expense
Packaging material
Labor costs determined on a per unit basis
Labor costs incurred irrespective of production quantities