42: 2-36 Income statement and schedule of cost of goods manufactured. The following items (in millions) pertain to Chester Corporation: Chester's manufacturing costing system uses a three-part classification nf dirnat manufacturing labor, and manufacturing overhead rnetn questions regarding these facts, see the next problem.) 2-37 Terminology, interpretation of statements (continuation of 2-36). 1. Calculate total prime costs and total coniversion costs. 2. Calculate total inventoriable costs and period costs. 3. Design costs and R\&D costs are not considered product costs for financial statement purposes. When 4. Suppose that both the direct materials as product costs? Give an example.: to the manufacture of 1 million units of pred and the depreciation on plant and equipment are related depreciation is computed on a straight-line basis. 5. Assume that the implied cost-behavior patterns in requirement A.persist. That is, direct material costs behave as a variable cost and depreciation on plant and equipment behaves as a fixed cost. Repeat the computations in requirement 4, assuming that the costs are being predicted for the manufacture of 2 million units of product. Determine the effect on total costs. 6. Assume that depreciation on the equipment (but not the plant) is computed based on the number of units produced because the equipment deteriorates with units produced. The depreciation rate on equipment is \$1 per unit. Calculate the depreciation on equipment assuming (a) 1 million units of product are produced and (b) 2 million units of product are produced