Coffee Cart sells a variety of hot and cold coffee beverages. Data for a recent month appear below:

Revenue                                                                                 $20,000

Costs:

Ingredients                                                 $7,800

Miscellaneous supplies (napkins, etc.)         1,200

Rent 1,000

Wages for part time employees 3,000

Cart attendant salary 5,000

Total costs                                                                  18,000

Profit                                                                                      $ 2,000

Part time employees are scheduled for busy times, but are sent home as soon as volumes drop enough to warrant it.

a. Categorize each cost as fixed or variable and explain your choice.

b. Create a cost function.