he following data is available for Crater Corporations North American division for the years 2014 and 2015. During these years there were no inventories in the system.

		2015		2014
Production quantity		55,000		59,000
Number of customers		13,400		12,500
Revenues	$	24,700,000	$	26,140,000
Expenses
Direct materials & components	$	3,222,500	$	3,555,700
Direct production wages (1)	$	1,466,000	$	1,608,600
Production supervisory salaries	$	268,900	$	245,600
Salaries paid to sales representatives (2)	$	610,500	$	632,100
Advertising	$	687,300	$	580,400
Insurance (3)	$	121,670	$	116,600
Building rent (4)	$	266,140	$	264,300
Other salaries (5)	$	1,175,000	$	1,247,000
Honorarium to the members of the board	$	437,700	$	437,700
Production quality control (6)	$	132,900	$	138,120
Market research	$	348,000	$	304,960
Depreciation (7)	$	1,329,700	$	1,171,900
Facilities management (8)	$	885,730	$	747,700
Legal	$	690,100	$	622,700
Personnel department	$	198,000	$	195,700
Utilitiesproduction (9)	$	860,100	$	770,200
Utilitiesother (10)	$	367,840	$	309,000
Customer service (11)	$	920,400	$	927,600
	$	13,988,480	$	13,875,880

Note:
1.	Paid on the basis of production quantity
2.	Ten representatives @ $24,000 per person + 1.5% of sales revenue
3.	Manufacturing - 70%; remaining - general liability
4.	Manufacturing - 65%; Marketing - 20%; remaining for Administration
5.	Manufacturing - 50%; Marketing - 20%; remaining for Administration
6.	Variable - 40%
7.	Manufacturing - 65%; Sales & Marketing - 10%; remaining for Adminsitration (all straight line)
8.	Factory maintenance - 40%; General maintenance - 60%
9.	Fixed - 40%
10.	Equally divided between Sales & Marketing and Administration; variable - 45%
11.	Variable - 20%

Required:

1.	Classify the expense items by behaviour (based on the number of units produced/sold) and by function (manufacturing, sales/marketing, and administration). Write the amount for each item using 2015 data.

2-a.	What were the total amounts for product costs and period costs during 2015?

2-b.	Classify the product costs as direct or indirect. (As appropriate, place an in the Direct or Indirect column.)

3.	Prepare an income statement in good form for the year 2015. Compute the gross margin per unit for the year.