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how to do the following 1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The
how to do the following 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.)
PROBLEM 18-1A (pages 792 in Fundamental Accounting Principles, 23 ed.) Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each. Variable or Fixed Product or Period VariableFixed Product Period Cost 1. Plastic for casing $17,000 2. Wages of assembly workers-$82,000 3. Property taxes on factory $5,000 4. Accounting staff salaries- $35,000 5. Drum stands (1,000 stands purchased)-$26,000 6. Rent cost of equipment for sales staff-$10,000 7.Upper management salaries-$125,000 8. Annual flat fee for factory maintenance service-$10,000 9. Sales commissions-$15 per unit 10. Machinery depreciation, straight-line-$40,000 2. Compute the manufacturing cost per drum set.
3. Assume that 1,200 drum sets are produced in the next year. What do you predict will be
the total cost of plastic for the casings and the per unit cost of the plastic for the
casings? Explain.
4. Assume that 1,200 drum sets are produced in the next year. What do you predict will be
the total cost of property taxes and the per unit cost of the property taxes? Explain.
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