Question

Question 3

[The following information applies to the questions displayed below.) Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $516 each. Costs 1. Plastic for casing-$19,000 2. Wages of assembly workers--$90,000 3. Property taxes on factory-$7,000 4. Accounting staff salaries-$33,000 5. Drum stands (1.000 stands purchased)-$35,000 6. Rent cost of equipment for sales staff-$36.000 7. Upper management salaries-$170,000 8. Annual flat fee for factory maintenance service--$16,000 9. Sales commissions-$25 per unit 10. Machinery depreciation, straight-line-$42,000

Answer 1

181 182 183 184 185 186 187 188 TrueBeat adjusted Summarized data for production 4000 to 8000 units Average Cost Per Unit Total Dollars Direct Materials 19 Direct Labor 108 Variable Manufacturing Overhead 62 Fixed Manufacturing Overhead 198000 (7000+8000+42000*1.50+120000) Fixed Selling & adminstrative expenses 275000 (33000+36000*2+170000) Variable Selling & adminstrative expenses 12.5 189 Sales Price Per Unit 516 190 191 192 3) a) 193 194 195 196 197 198 199 200 201 202 Sales Revenue Variable Production Costs Variable S& A expenses Contribution Margin Fixed Overhead Fixed S&A expenses Net Operating Income TrueBeat Income Statement (Variable Costing) For Years Ending December 31 Year 2 1548000 567000 37500 943500 198000 275000 470500 Year 3 2580000 945000 62500 1572500 198000 275000 1099500 Year 4 3096000 1134000 75000 1887000 198000 275000 1414000

2043)b) 205 206 TrueBeat Income Statement (Absorption Costing) For Years Ending December 31 Year 2 1548000 715500 207 Year 3 Year 4 3096000 208 2580000 1192500 209 Sales Revenue Cost of Goods Sold Gross Margin S & A expenses Net Operating Income 1332000 1764000 210 832500 1387500 211 312500 337500 350000 212 520000 1050000 1414000 213 214