Listed here are the total costs associated with the 2017 production of 1,000 dru

Question

Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $439 each Costs 1. Plastic for casing-$16,000 2. Wages of assembly workers-$84,000 3. Property taxes on factory-$4,000 4. Accounting staff salaries-$33,000 5. Drum stands (1,000 stands purchased)-$27,000 6. Rent cost of equipment for sales staff-$36,000 7. Upper management salaries-$140,000 8. Annual flat fee for factory maintenance service-$15,000 9. Sales commissions-$20 per unit 10. Machinery depreciation, straight-line-$35,000 equired: Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed a xample.) Cost by Behavior Cost by Function Costs Variable Fixed Product Period 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 16,000 16,000

Explanation / Answer

Variable Fixed Product Period Plastic for casing 16000 16000 Wages of assembly workers 84000 84000 Property taxes on factory 4000 4000 Accounting staff salaries 33000 33000 Drum stands 27000 27000 Rent cost of equipment for sales staff 36000 36000 Upper mgmt. salaries 140000 140000 Annual flat fee paid for maintenance service 15000 15000 Sales commissions 20000 20000 Machinery depreciation, straight-line 35000 35000

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