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Thomas planned to set up a business that build custom house for high net-worth customers in Upstate NY on January 1tt,2023. He would borrow $1,500,000 from a bank to invest in the business as star-up capital and receive a minimum salary of $5,000/ month. Here is the list of some related items or products that he would need to start the business: - Lumber - Roof - Concrete - Insulation - Ducting - Paint - Corporate office building He needs to hire you as an accountant to help his financial and accounting work, and one supervisor who is in charge of the supervision of building custom houses. His business' cost drivers are provided in Table 1. Part 1.1 - Cost Classification (10 points) Required: Thomas needs your help in classifying the various costs. In order to manage these costs, he wants them identified using the information below. He asked that you use Table 2 (page 3) for your answers. a) Bchavior: fixed or variable cost b) Financial reporting: product or period c) If product cost, identify which items are direct materials, direct labor or manufacturing overhead. Part 1.2- Costing Systems (10 points) Thomas discussed the business plan with you. He was told that there are three different types of costing systems that exist in organizations - job order, process costiag and activituhased costing. Required: Which type of costing system is his business most likely to use? Explain

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