Natural Taste is a new startup company that is specialized

. Natural Taste is a new startup company that is specialized in water purifying industry has the following costs Safety instrument $3,000 Materials waste $1,000 Electricity cost in offices $500 Periodic replacement parts after 10,000 bottles produced Cost of equipment and installation $50,000 Minerals used at purification $20,000 Clerical Salaries = $4,500 Material used in Bottles $1,500 Administrative expenses = $2,900 Labor used in production = $11,500 Fixed manufacturing costs used in production = $10.500 S750 a. Categorize the costs given into fixed or variable costs, recurring or nonrecurring costs and direct or indirect costs? What is the total fixed cost, the total variable cost and total direct cost in dollars? b.

Solution

1. categorisation of costs into fixed, variable, recurring , non recurring:

b.

total fixed cost:

Total variable cost:

total direct cost :

	fixed	variable	recurring	non recurring
safety instrument	y			y
materials waste		y	y
electricity cost in offices	y		y
periodic replacement of parts after 10,000 bottles		y	y
cost of equipment and installation	y			y
minerals used at purification		y	y
clerical salaries	y		y
material used in bottles		y	y
administrative expenses	y		y
labour used in production		y	y
fixed manufacturing cost used in production	y		y