Listed here are the total costs associated with the 2015 production of 1,000 dru
ID: 2484292 • Letter: L
Question
Listed here are the total costs associated with the 2015 production of 1,000 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 salaries—$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
Explanation / Answer
Solution :- Manufacturing cost per drum set for year ended 2015
Plastic for casing (Variable)
Wages for assembly workers (Variable)
Drum stands (Variable)
17000
82000
26000
17 (17000 / 1000)
82 (82000 / 1000)
26 (26000 / 1000)
Property taxes (Fixed)
Factory maintenance service fees (Fixed)
Depreciation (Fixed)
5000
10000
40000
5 (5000 / 1000)
10 (10000 / 1000)
40 (40000 / 1000)
Particulars Total cost Per unit costPlastic for casing (Variable)
Wages for assembly workers (Variable)
Drum stands (Variable)
17000
82000
26000
17 (17000 / 1000)
82 (82000 / 1000)
26 (26000 / 1000)
Total variable production cost 125000 125Property taxes (Fixed)
Factory maintenance service fees (Fixed)
Depreciation (Fixed)
5000
10000
40000
5 (5000 / 1000)
10 (10000 / 1000)
40 (40000 / 1000)
Total fixed production cost 55000 55 Total production cost (Fixed + Variable) 180000 180 (125 + 55)Related Questions
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