17\ndrag each label to the correct location on the table.\na manufacturing plant is bought on lease to…

17\ndrag each label to the correct location on the table.\na manufacturing plant is bought on lease to manufacture fishing reels. categorize the cost components into fixed and variable costs.

17\ndrag each label to the correct location on the table.\na manufacturing plant is bought on lease to manufacture fishing reels. categorize the cost components into fixed and variable costs.

Answer

Explanation:

Step1: Define fixed and variable costs

Fixed costs do not change with the level of production. Variable costs change with the level of production.

Step2: Analyze each cost - component

  • Plant lease: It is a fixed cost as the lease amount is usually set and does not vary with the number of fishing - reels produced.
  • Raw materials (steel in this case): It is a variable cost as more raw materials are needed when more fishing - reels are produced.
  • Utility bills: These can be considered variable as they may increase with more production (more machines running, more lighting needed etc.).
  • Labor cost: If it is based on the number of units produced or hours worked directly related to production, it is a variable cost. If it is a salaried workforce not directly tied to production volume, it could be fixed. Assuming a production - based labor cost here, it is variable.

Answer:

Fixed Cost: Plant lease Variable Cost: Raw materials (steel), Utility bills, Labor cost