Question

Required information - [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 $536 each. Costs 1. Plastic for casing-$17,000 2. Wages of assembly workers-$83,000 3. Property taxes on factory-$7,000 4. Accounting staff salaries-$41,000 5. Drum stands (1,000 stands purchased)-$35,000 6. Rent cost of equipment for sales staff-$36,000 7. Upper management salaries-$210,000 8. Annual flat fee for factory maintenance service-$22,000 9. Sales commissions-$13 per unit 10. Machinery depreciation, straight-line-$37,000 equired: Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The firs Empleted as an example.) Cost by Behavior Variable Fixed 17,000 Cost by Function Product Period $ 17,000 Costs 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

	Costs	Variable	Fixed	Product	Period
1	Plastic for casing	17000		17000
2	Wages of assembly workers	83000		83000
3	Property taxes on factory		7000	7000
4	Accounting staff salaries		41000		41000
5	Drum stands	35000		35000
6	Rent cost of equipment for sales staff		36000		36000
7	Upper management salaries		210000		210000
8	Annual flat fee for factory maintenance service		22000	22000
9	Sales commission	13000			13000
10	Machinery depreciation		37000	37000

2
Item	Total cost	Per unit cost
Variable production costs:
Plastic for casing	17000	17
Wages of assembly workers	83000	83
Drum stands	35000	35
Total Variable production costs	135000	135
Fixed production costs:
Property taxes on the factory	7000	7
Annual flat fee for factory maintenance service	22000	22
Machinery depreciation, straight-line	37000	37
Total Fixed production costs	66000	66
Total production cost	201000	201