Question

Required information [The following information applies to the questions displayed below.] Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $537 each. Costs 1. Plastic for casing-$20,000 2. Wages of assembly workers-$82, 000 3. Property taxes on factory-$6,000 4. Accounting staff salaries-$34, 000 5. Drum stands (1, 000 stands purchased) $32,000 6. Rent cost of equipment for sales staff-$24,000 7. Upper management salaries -$220,000 8. Annual flat fee for factory maintenance service-$15,000 9. Sales commissions -$14 per unit 10. Machinery depreciation, straight-line -$41,000 Required:

Answer 1

1		Cost by behavior		Cost by function
	Costs	Variable	Fixed	Product	Period
1	Plastic for casing	$     20,000		$ 20,000
2	Wages of assembly workers	$     82,000		$ 82,000
3	Property taxes on factory		$       6,000	$    6,000
4	Accounting staff salaries		$     34,000		$     34,000
5	Drum stands	$     32,000		$ 32,000
6	Rent cost of equipment for sales staff		$     24,000		$     24,000
7	Upper management salaries		$ 2,20,000		$ 2,20,000
8	Annual flat fee paid for maintenance services		$     15,000	$ 15,000
9	Sales commissions ($14 X 1000)	$     14,000			$     14,000
10	Machinery depreciation - straight line		$     41,000	$ 41,000
2		Total cost	Per unit cost
	Variable production cost	(a)	(a) / 1000 units
	Plastic for casing	$     20,000	$             20
	Wages of assembly workers	$     82,000	$             82
	Drum stands	$     32,000	$             32
(i)	Total Variable production cost	$ 1,34,000	$           134
	Fixed production cost
	Property taxes on factory	$       6,000	$               6
	Annual flat fee paid for maintenance services	$     15,000	$             15
	Machinery depreciation - straight line	$     41,000	$             41
(ii)	Total Fixed production cost	$     62,000	$             62
(i) + (ii)	Total production cost	$ 1,96,000	$           196