Question

1. Plastic for casing-$17,889 2. Wages of assenbly workers-$82,888 3. Property taxes on factory-$5,888 4. Accounting staff salaries-$35,888 S. Drum stands (1,888 stands purchased)-$26,888 6. Rent cost of equipnent for sales staff-$19,868 7.Upper management salaries-$125,889 8. Annual flat fee for factory maintenance service-$19,82e 9. Sales comnissions-$15 per unit 19. Machinery depreciation, straight-line $48,888 Problem 14-1A Part 1 Required: 1. Classify each cost and its amount as (a) elther varlable or fixed and (b) elther product or perlod. (The first cost Is completed as an example.) Costs Fixed Period 1. Plastic for casing 2. Wages of assembly workers 3. Property taxes on factory 4. Accounting staff salaries 5. Drum stands 6. Rent cost of equipment for sales staff 7. Upper management salaries 8. Annual fat fee for factory maintenance service 9. Sales commissions 17.000 17.000 82.000 82.000

Answer 1

Ques 1
	Cost by behaviour		Cost by Function
Costs	Variable	Fixed
Plastic for casing	$17,000		$17,000
Wages of assembly workers	82,000		82,000
Property taxes on factory		$5,000	5,000
Accounting staff salaries		35,000		$35,000
Drum stands (1,000 stands outsourced)	26,000		26,000
Rent cost of equipment for sales staff		10,000		10,000
Upper mgmt. salaries		125,000		125,000
Annual flat fee paid for maintenance service		10,000	10,000
Sales commissions	$15 x units sold			$15 x units sold
Machinery depreciation, straight-line		40,000	40,000
Ques 2
TrueBeat
Calculation of Manufacturing Cost per Drum Set
For Year Ended December 31, 2017
	Total cost
Item	(at 1,000 units)	Per unit cost*
Variable production costs
Plastic for casing	$17,000	$17
Wages of assembly workers	82,000	82
Drum stands	26,000	26
Total variable production costs	125,000	125
Fixed production costs
Property taxes on factory	5,000	5
Annual fee for maintenance service	10,000	10
Machinery depreciation	40,000	40
Total fixed production costs	55,000	55
Total production cost	$180,000	$180
*Total cost / 1,000 drum sets