Item1 20points eBook Print References Check my workCheck My Work button is now enabled1 Item 1 Item 1 20 points Cycle Business manufactures and sells road and mountain bikes through a network of retail outlets in western Canada Below is a partial list of expense items incurred in the most recent month (November), when 1,080 bicycles were manufactured, shipped, and sold There was no beginning or ending work in process or finished goods inventory in November Item October November Units produced and sold 980 1,080 Sales $ 980,000 $ 1,080,000 Leather used for the bicycle seats 27,440 30,240 Production managers salary 6,400 6,400 Life insurance for the company president 240 240 Electricity used in the production facilities 4,060 4,460 Sales commissions 45,800 50,960 Internet advertising 1,100 1,100 Employee benefits for the production workers 27,440 30,240 Property taxes on the production facilities 1,400 1,400 Shipping costs 45,800 50,960 Salary of the chief financial officer 10,800 10,800 Each month, regardless of how much electricity is used, Cycle Business pays a $140 base charge to the utilities company Employee benefits total 20 of the wages paid to production workers, who on average earn $20 per hour Each bicycle requires 7 hours of direct labour Required 1 With respect to the partial list of November expenses Use the Type column to label each item as a Manufacturing, Administrative, or Selling cost For those items you labeled as a Manufacturing cost, Use the Behaviour column to label each item as variable or fixed manufacturing costs Use the Direct Indirect column to label each item as a direct or indirect cost 2 Assume that 1,280 bicycles will be manufactured and sold in December For the items you classified as manufacturing costs in requirement 1, estimate the cost for December Assume that there will be no change in unit costs for any direct materials, hourly wages will remain the same, and employee benefits will continue at 20 of wages

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Item1 20points eBook Print References Check my workCheck My Work button is now enabled1 Item 1 Item 1 20 points Cycle Business manufactures and sells

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Item 1 20 points

Cycle Business manufactures and sells road and mountain bikes through a network of retail outlets in western Canada. Below is a partial list of expense items incurred in the most recent month (November), when 1,080 bicycles were manufactured, shipped, and sold. There was no beginning or ending work in process or finished goods inventory in November:

Item	October		November
Units produced and sold		980		1,080
Sales	$	980,000	$	1,080,000
Leather used for the bicycle seats		27,440		30,240
Production managers salary		6,400		6,400
Life insurance for the company president		240		240
Electricity used in the production facilities*		4,060		4,460
Sales commissions		45,800		50,960
Internet advertising		1,100		1,100
Employee benefits for the production workers		27,440		30,240
Property taxes on the production facilities		1,400		1,400
Shipping costs		45,800		50,960
Salary of the chief financial officer		10,800		10,800

*Each month, regardless of how much electricity is used, Cycle Business pays a $140 base charge to the utilities company.
Employee benefits total 20% of the wages paid to production workers, who on average earn $20 per hour. Each bicycle requires 7 hours of direct labour.

Required:

1. With respect to the partial list of November expenses:

Use the Type column to label each item as a Manufacturing, Administrative, or Selling cost.
For those items you labeled as a Manufacturing cost,

Use the Behaviour column to label each item as variable or fixed manufacturing costs.
Use the Direct/Indirect column to label each item as a direct or indirect cost.

2. Assume that 1,280 bicycles will be manufactured and sold in December. For the items you classified as manufacturing costs in requirement 1, estimate the cost for December. Assume that there will be no change in unit costs for any direct materials, hourly wages will remain the same, and employee benefits will continue at 20% of wages.