Question

Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each. Variable or Fixed Product or Period Costs Variable Fixed Product Period $17,000 $17,000 1. Plastic for casing-$17,000 2. Wages of assembly workers-$82,000 3. Property taxes on factory-$5,000 4. Accounting staff salaries-$35,000 5. Drum stands (1,000 stands purchased)-$26,000 6. Rent cost of equipment for sales staff-$10,000 7. Upper management salaries—$125,000 8. Annual flat fee for factory maintenance service-$10,000 9. Sales commissions-$15 per unit 10. Machinery depreciation, straight-line-$40,000

Answer 1

					Cost by Behaviour		Cost by function
					Variable	fixed	product	period
	Costs
1	Plastic for casing				17,000		17,000
2	Wages of assembly workers				82,000		82,000
3	property taxes on factory					5,000	5,000
4	Accounting staff salaries					35,000		35,000
5	Drum stands				26,000		26,000
6	Rent cost of Equipment for sales staff					10,000		10,000
7	Upper manangement salaries					125,000		125,000
8	Annual flat fee for factory maintenance service					10,000	10,000
9	Sales commissions				15,000			15,000
10	Machinery depreciation,straight line					40,000	40,000
2)		Manufacturing cost per drum set
	Item					total cost	per unit
	Variable production costs
	Plastic for casing					17,000	17
	wages of assembly workers					82,000	82
	Drum stand					26,000	26
	total variable production costs					125,000	125
	Fixed production costs
	property taxes on factory					5,000	5
	annual fee for factory maintenance service					10,000	10
	Machinery depreciation					40,000	40
	total fixed production costs					55,000	55
	total production cost					180,000	180
3)	total cost of plastic for casting			1200*17
				20400
	per unit cost of plastic for casing			$17
4)	total cost of propeerty taxes			5000
	per unit cost			4.166667