Question

Required information Problem 14-1A Cost computation, classification, and analysis LO C2, C3 [The following information applies to the questions displayed below.) Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by True drum sets sell for $500 each. Costs 1. Plastic for casing-$17,000 2. Wages of assembly workers-582,800 3. Property taxes on factory-55,000 4. Accounting staff salaries-$35,000 5. Drum stands (1,880 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-510,000 9. Sales comissions-$15 per unit 10. Machinery depreciation, straight-line-540,000 Problem 14-1A Part 1 Required: 1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period (The first cost is comp example.) Cost by Behavior Variable Fixed Cost by Function Product Period Costs

Answer 1

		Cost by Behavior		Cost by Function
	Costs	Variable	Fixed	Product	Period
1.	Plastic for casing	17,000		17,000
2.	Wages for 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 management salaries		125,000		125,000
8.	Annual flat fee for factory maintenance service		10,000	10,000
9.	Sales commission	15,000			15,000
10.	Machinery depreciation straight-line		40,000	40,000

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