EGM 540: QUESTIONS AND ANSwERS WEEK 1 & 2 Q1. Identify which of the following transactions and events are product costs and which are period costs: Storage and material handling costs for raw materials. Gains or losses on the disposal of factory equipment. Lubricants for machinery and equipment used in production. Depreciation of a factory building. Depreciation of manufacturing equipment. Depreciation of the company president's automobile. Leasehold costs for land on which factory building stand. Inspection costs of finished goods. Direct labor costs. Raw-materials costs. Advertising costs. Q2. Identify which of the following costs are fixed and which are variable: Wages paid to temporary workers. Property taxes on a factory building. Property taxes on an administrative building. Sales commission. Electricity for machinery and equipment in the plant. Heating and air-conditioning for the plant. Salaries paid to design engineers. Regular maintenance on machinery and equipment Basic raw materials used in production. Factory fire insurance Q3. Harris Company manufactures a single product. Costs for the year 2001 for output levels of 1,000 and 2,000 units are given in below Table. At each level of output, compute the following: (a) Total manufacturing costs. (b) Manufacturing costs per unit. (c) Total variable costs. (d) Total variable costs per unit. (e) Total costs that have to be recovered ifthe firm is to make a profit