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Question: todd radford has invented a new type of lowfriction broom...

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Todd Radford has invented a new type of low-friction broom. After giving the matter much thought, Todd is pretty sure he will quit his $2,000 per month job with a janitorial service and produce and sell the brooms full time. Todd will rent a small building and use it as a production plant. The rent will be $1,500 per month Todd will rent production equipment at a cost of $550 per month The cost of materials for each broom will be $11.50. Todd will hire workers to produce the brooms They will be paid S4.25 for each completed unit. Todd will rent a room in the house next door for use as his sales office. The rent will be $250 per month. He has arranged for the telephone company to add voicemail 1 monthly phone bill by $5 Todd has some money in savings that is earning interest of $1,100 per year. These savings will be withdrawn and used for about a year to get the business going. To sell his brooms, Todd will advertise heavily in the local area. Advertising costs will be $450 per month. In addition, Todd will pay a sales the new company. Todd has already paid the legal and filing fees to incorporate his business. These fees
Required: 1. Listed below are difterent costs associated with the new company. Choose Yes/No under each heading that helps to describe the type of cost involved Product Cost Variable Fixed Direct Direct Period (Selling and Opportunity Sunk Cost Name of the Cost Cost Cost Materials Labour Overhead Administrative) Cost Todds present salary of $2,000 per month Rent on the production building, $1,500 per month Rent of production equipment, $550 per month Materials for producing brooms, at $11.50 each Labour cost of producing brooms, at $4.25 each Rent of room for a sales office, $250 per month Voice mail, $5 per month Interest lost on savings account, S1,100 per year Advertising cost, $450 per month Sales commission, at $0.80 per broom Legal and filing fees, $1,500
2. All of the costs listed above, except one, are differential costs between the alternatives of Todd producing brooms or staying with the janitorial service. Which cost is not differential? O Todds present salary of $2,000 per month Rent on the production building, $1,500 per month Rent of production equipment, $550 per month Materials for producing brooms, at $11.50 each O Labour cost of producing brooms, at $4.25 each O Rent of room for a sales office, $250 per month O Voice mail, $5 per month Interest lost on savings account, $1,100 per year Advertising cost, $450 per month Sales commission, at S0.80 per broom O Legal and filing fees, $1,500
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