Question

Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $553 each. Costs 1. Plastic for casing-$21,000 2. Wages of assembly workers-$82,000 3. Property taxes on factory-$7,000 4. Accounting staff salaries-$32,000 5. Drum stands (1,000 stands purchased) $40,000 6. Rent cost of equipment for sales staff-$36,000 7. Upper management salaries-$220,000 8. Annual flat fee for factory maintenance service-$14,000 9. Sales commissions $18 per unit 10. Machinery depreciation, straight-line-$47,000

Answer 1

Calculation of Manufacturing Cost per Drum Set
PARTICULARS	Total cost ($)	Per unit cost ($)
Variable production costs
Plastic for casing	21,000.00	21.00
Wages of assembly workers	82,000.00	82.00
Drum stands	40,000.00	40.00
Total variable production costs	1,43,000.00	143.00
		-
Fixed production costs		-
Property taxes on factory	7,000.00	7.00
Annual fee for maintenance service	14,000.00	14.00
Machinery depreciation	47,000.00	47.00
		-
Total fixed production costs	68,000.00	68.00
		-
Total production cost	2,11,000.00	211.00
profit = (Q*CM)-FC
SALES	XXX	553.00
LESS VARIABLE COST	(XXX)	143.00
CONTRIBUTION	XXX	410.00
LESS FIXED COST	(XXX)	68.00
PROFIT	XXX	342.00
UNITS	SALES REVENUE	VARIABLE EXPENSES	FIXED EXPENSES	PROFIT/NOI
4000	22,12,000.00	5,72,000.00	68,000.00	15,72,000.00
5000	27,65,000.00	7,15,000.00	68,000.00	19,82,000.00
6000	33,18,000.00	8,58,000.00	68,000.00	23,92,000.00
7000	38,71,000.00	10,01,000.00	68,000.00	28,02,000.00
C-V-PGRAPH A $45,00,000 $40,00,000 $35,00,000 $30,00,000 $25,00,000 $20,00,000 $15,00,000 $10,00,000 $5,00,000 B с $0 0 4,000 5,000 6,000 7,000 Sales Volume (units)