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 $452 each. Costs 1. Plastic for casing-$19,000 2. Wages of assembly workers-$92,000 3. Property taxes on factory-$6,000 4. Accounting staff salaries-$37,000 5. Drum stands (1,000 stands purchased)-$34,000 6. Rent cost of equipment for sales staff-$36,000 7. Upper management salaries-$125,000 8. Annual flat fee for factory maintenance service-$22,000 9. Sales commissions-$12 per unit 10. Machinery depreciation, straight-line-$47,000

Answer 1

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1		Cost by behavior		Cost by function
	Costs	Variable	Fixed	Product	Period
1	Plastic for casing	$     19,000		$ 19,000
2	Wages of assembly workers	$     92,000		$ 92,000
3	Property taxes on factory		$       6,000	$    6,000
4	Accounting staff salaries		$     37,000		$     37,000
5	Drum stands	$     34,000		$ 34,000
6	Rent cost of equipment for sales staff		$     36,000		$     36,000
7	Upper management salaries		$ 1,25,000		$ 1,25,000
8	Annual flat fee paid for maintenance services		$     22,000	$ 22,000
9	Sales commissions ($12 X 1000)	$     12,000			$     12,000
10	Machinery depreciation - straight line		$     47,000	$ 47,000
2		Total cost	Per unit cost
	Variable production cost	(a)	(a) / 1000 units
	Plastic for casing	$     19,000	$             19
	Wages of assembly workers	$     92,000	$             92
	Drum stands	$     34,000	$             34
(i)	Total Variable production cost	$ 1,45,000	$           145
	Fixed production cost
	Property taxes on factory	$       6,000	$               6
	Annual flat fee paid for maintenance services	$     22,000	$             22
	Machinery depreciation - straight line	$     47,000	$             47
(ii)	Total Fixed production cost	$     75,000	$             75
(i) + (ii)	Total production cost	$ 2,20,000	$           220