Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis.Bill will rent a garage for $300 per month for production purposes.Utilities will cost $40 per month.Bill has already taken an industrial design course at the local community college to help prepare for this venture.The course cost $300.Bill will rent production equipment at a monthly cost of $800.He estimates the material cost will be $5 per unit,and the labour cost will be $3 per unit.He will hire workers and spend his time promoting the product.To do this,he will quit his job,which pays $3,000 per month.Advertising and promotion will cost $900 per month.
Required:
Complete the chart below by placing an "X" under each heading that helps to identify the cost involved.You can place an "X" under more than one heading for a single cost: for example,a cost may be a sunk cost,an overhead cost,and a product cost; you would place an "X" under each of these headings opposite the cost.
* Between the alternatives of going into business to make the device or not going into business to make the device.See columnheading "Differential Cost".
$\begin{array}{|l|l|l|l|l|l|l|l|l|}
\hline& \begin{array}{l}\text { Opportunity }\
\text { Cost }
\end{array} & \begin{array}{l}
\text { Sunk } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Variable } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Fixed } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Mfg. } \
\text { Overhead }
\end{array} & \begin{array}{l}
\text { Product } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Selling } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Differential } \
\text { Cost }
\end{array} \\hline \text { Garage rent } \
\hline \text { Utilities } \
\hline \text { Cost of the }\\text { industrial }\\text { design course }\
\hline\text { Equipment }\\text { rented }\
\hline \text { Material cost } \
\hline \text { Labour cost } \
\hline \text { Present salary } \
\hline \text { Advertising } \
\hline
\end{array}$

Question

Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis.Bill will rent a garage for $300 per month for production purposes.Utilities will cost $40 per month.Bill has already taken an industrial design course at the local community college to help prepare for this venture.The course cost $300.Bill will rent production equipment at a monthly cost of $800.He estimates the material cost will be $5 per unit,and the labour cost will be $3 per unit.He will hire workers and spend his time promoting the product.To do this,he will quit his job,which pays $3,000 per month.Advertising and promotion will cost $900 per month.
Required:
Complete the chart below by placing an "X" under each heading that helps to identify the cost involved.You can place an "X" under more than one heading for a single cost: for example,a cost may be a sunk cost,an overhead cost,and a product cost; you would place an "X" under each of these headings opposite the cost.
* Between the alternatives of going into business to make the device or not going into business to make the device.See columnheading "Differential Cost".
 $\begin{array}{|l|l|l|l|l|l|l|l|l|}
\hline& \begin{array}{l}\text { Opportunity }\
\text { Cost }
\end{array} & \begin{array}{l}
\text { Sunk } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Variable } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Fixed } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Mfg. } \
\text { Overhead }
\end{array} & \begin{array}{l}
\text { Product } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Selling } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Differential } \
\text { Cost }
\end{array} \\hline \text { Garage rent }  \
\hline \text { Utilities }  \
\hline \text { Cost of the }\\text { industrial }\\text { design course }\
\hline\text { Equipment }\\text { rented }\
\hline \text { Material cost }  \
\hline \text { Labour cost }  \
\hline \text { Present salary } \
\hline \text { Advertising } \
\hline
\end{array}$

Quizplus · Accepted Answer

The Answer of Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis.Bill will rent a garage for $300 per month for production purposes.Utilities will cost $40 per month.Bill has already taken an industrial design course at the local community college to help prepare for this venture.The course cost $300.Bill will rent production equipment at a monthly cost of $800.He estimates the material cost will be $5 per unit,and the labour cost will be $3 per unit.He will hire workers and spend his time promoting the product.To do this,he will quit his job,which pays $3,000 per month.Advertising and promotion will cost $900 per month.
Required:
Complete the chart below by placing an "X" under each heading that helps to identify the cost involved.You can place an "X" under more than one heading for a single cost: for example,a cost may be a sunk cost,an overhead cost,and a product cost; you would place an "X" under each of these headings opposite the cost.
* Between the alternatives of going into business to make the device or not going into business to make the device.See columnheading "Differential Cost".
 $\begin{array}{|l|l|l|l|l|l|l|l|l|}
\hline& \begin{array}{l}\text { Opportunity }\
\text { Cost }
\end{array} & \begin{array}{l}
\text { Sunk } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Variable } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Fixed } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Mfg. } \
\text { Overhead }
\end{array} & \begin{array}{l}
\text { Product } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Selling } \
\text { Cost }
\end{array} & \begin{array}{l}
\text { Differential } \
\text { Cost }
\end{array} \\hline \text { Garage rent }  \
\hline \text { Utilities }  \
\hline \text { Cost of the }\\text { industrial }\\text { design course }\
\hline\text { Equipment }\\text { rented }\
\hline \text { Material cost }  \
\hline \text { Labour cost }  \
\hline \text { Present salary } \
\hline \text { Advertising } \
\hline
\end{array}$

Bill Pope Has Developed a New Device That Is So