Listed here are the total costs associated with the 2017 production of 15,000 Blu-ray Discs (BDs) manufactured by Maxwell. The BDs sell for $18 each.

Required
1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example.)
2. Compute the manufacturing cost per BD.
Analysis Component
3. Assume that 10,000 BDs are produced in the next year. What do you predict will be the total cost of plastic for the BDs and the per unit cost of the plastic for the BDs? Explain.
4. Assume that 10,000 BDs are produced in the next year. What do you predict will be the total cost of factory rent and the per unit cost of the factory rent? Explain.

Transcribed Image Text:

Varlabla or Fixed Product or Perlod Costs Variable Flxed Product Period .S120 1. Plastic for BDs-$1,500 2. Wages of assembly workers-$30,000 3. Cost of factory rent-$6,750 4. Systems staff salaries-$15,000 5. Labeling-$0.25 per BD. 6. Cost of office equipment rent-$1,050. 7. Upper management salaries-$120,000 8. Annual fixed fee for cleaning service $4,520. 9. Sales commissions-$0.50 per BD 10. Machinery depreciation, straight-line-$18,000 1,500 $1,500