Question

The following information applies to the questions displayed below) Listed here are the total costs associated with the 2015 production of 1000 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 salones-$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 15. 525 points Required: 1. Classify each cost and its amount as (@) either variable or fired and (b) either product or period. (The first cost is completed as an example.) Costs Cost by Behavior Variable Fixed 17.000 82,000 S35,000 $ Cost by Function Product Period 17,000 82,000 5,000 26.000 25 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 10.000 40,000 201001

Answer 1

Accounting staff salaries, Rent cost of equipment for sales staff and upper management salaries are fixed and period costs.

Sales commission is a variable and period cost.

Item	Total cost	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
Factory maintenance service fee	10,000	10
Machinery depreciation	40,000	40
Total Fixed production costs	55,000	55
Total production costs	$180,000	$180

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