Question

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The following information applies to the questions displayed below! Listed here are the total costs associated with the 2015 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each Costs 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 5.26 points Required: Required: 1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example) Cost by Behavior Variable Fixed 17,000 Cost by Function Product Period $ 17,000 EEN 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 flat fee for factory maintenance service 9. Sales commissions 10. Machinery depreciation, straight-line

Answer 1

		Cos of Behavior		Cost by Function
	Costs	Variable	Fixed	Product	Period
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 management 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

9. Sale commissions = $15 per unit

Sales commissions = 15 x Number of units

= 15 x 1,000

= $15,000

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