2 Required information Problem 18-1A Cost computation, classification, and analy

Question

2 Required information Problem 18-1A Cost computation, classification, and analysis LO C2, c3 The folowing information applies to the questions displayed below Pert 1 of 2 Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $474 each 4. Accounting staff salarles-$34,008 5. Drum stands (1,000 stands purchased)-$31,000 References 8. Annual flat fee for factory maintenance service-$22,669 9. Sales commissions-517 per unit

Explanation / Answer

variable costs are those which change in proportion to the change in sales units.

Fixed costs are those which remain constant irrespective of the production volume.

Product costs are those which are directly traced to the product.

Period costs are those which cannot be directly traced to the product.

Costs Variable Fixed Product Period 1 Plastic for casing $22,000 $22,000 2 wages of assembly $82,000 $82,000 3 Property taxes on factory $5,000 $5,000 4 Accounting staff salaries $34,000 $34,000 5 Drum stands $31,000 $31,000 6 rent cost of equipment for sales staff $36,000 $36,000 7 upper management salaries $150,000 $150,000 8 Annual flat fee for factory maintenance service $22,000 $22,000 9 sales commissions $17 * number of units sold $17*number of units sold 10 machinery depreciation, straight line -$48,000 $48,000 $48,000

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