Required Required Listed below are different costs associate

Required:

Required:

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.

Product Cost Period (Selling and opportunity Sunk Cost Variable Fixed Direct Cost Materials Labour Name of the Cost Direct Manufacturing Administrative) Cost Cost Overhead

Solution

Name of the cost Product Cost Variable Cost Fixed Cost Direct Materials Direct Labour Manufacturing Overhead Period (Selling and administrative) cost Opportunity Cost Sunk Cost Return earned on Investment $5000 per year Yes No Yes Yes Yes No Yes No Variable cost (product cost) are those cost that vary depending on Company\'s product decision. Fixed cost (period cost) are those cost which tend to remain same regardless of product decision. Opportunity cost is the cost of an alternative that must be forgone to pursue new product decision. Sunk cost are those cost that has already been incurred and thus can\'t be recovered and hence doesn\'t affect decision making process.