Task Team of FUNdaMENTAL aCCOUNtIng School of Business. Sun Yat-sen University Rather than renewing the lease, ABC Company is considering using the space itself to manufacture a new product Under this option, the unused space will continue to be depreciated on a straight-line basis, as in past years Direct materials and direct labour cost for the new product is $45 per unit. In order to store finished units of the new product, the company will rent a small warehouse nearby. The rental cost is $1, 800 per month. It will cost the company an additional $3, 500 each month to advertise the new product. A new production supervisor, hired to oversee production of the new product, will be paid $2, 500 per month. The company will pay a sales commission of $12 for each unit of product that is sold Required: Complete the chart below(in the next page)by placing an"" under each column heading that helps to identify the costs listed to the left You can place an"V under more than one ading for a single cost: for example, a cost may be a product cost, an opportunity cost, and a sunk cost; you would place an"" under each of these headings on the answer sheet opposite the cost Opportunity Sunk cost/Variable Fixed Product elli dministration Rent on unuse ractory space apreciation Irec warehouse dvertising cost commissions Key points 1. definition of managerial accounting 2. cost classification 3. job order cost accounting systems 4. cost allocation Reading material 1. Charles T Horngren, George Foster and Srilant Datar, Cost Accounting: A Managerial Emphasis(Tenth Edition), Prentice Hall Inc, 2000 2. Anthony A Atkinson, Rajiv D Banker, Robert S Kaplan, S Mark Young, Management Accounting, Prentice Hall Inc, 200Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Yat-sen University Rather than renewing the lease, ABC Company is considering using the space itself to manufacture a new product. Under this option, the unused space will continue to be depreciated on a straight-line basis, as in past years. Direct materials and direct labour cost for the new product is $45 per unit. In order to store finished units of the new product, the company will rent a small warehouse nearby. The rental cost is $1,800 per month. It will cost the company an additional $3,500 each month to advertise the new product. A new production supervisor, hired to oversee production of the new product, will be paid $2,500 per month. The company will pay a sales commission of $12 for each unit of product that is sold. Required: Complete the chart below (in the next page) by placing an "" under each column heading that helps to identify the costs listed to the left. You can place an "" under more than one heading for a single cost: for example, a cost may be a product cost, an opportunity cost, and a sunk cost; you would place an "" under each of these headings on the answer sheet opposite the cost. Opportunity cost Sunk cost Variable cost Fixed cost Product cost Selling and administration cost Rent on unused factory space depreciation Direct material + direct labour Rental cost of warehouse Advertising cost Supervisor’s salary Sales commissions Key points 1. definition of managerial accounting 2. cost classification 3. job order cost accounting systems 4. cost allocation Reading material 1. Charles T. Horngren, George Foster and Srilant Datar, Cost Accounting: A Managerial Emphasis (Tenth Edition), Prentice Hall Inc., 2000. 2. Anthony A. Atkinson, Rajiv D.Banker, Robert S. Kaplan, S. Mark Young, Management Accounting , Prentice Hall Inc., 2001