Question
Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $523 each.
Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $523 each.
Costs:
1. | Plastic for casing$20,000 |
2. | Wages of assembly workers$90,000 |
3. | Property taxes on factory$5,000 |
4. | Accounting staff salaries$31,000 |
5. | Drum stands (1,000 stands purchased)$41,000 |
6. | Rent cost of equipment for sales staff$36,000 |
7. | Upper management salaries$175,000 |
8. | Annual flat fee for factory maintenance service$14,000 |
9. | Sales commissions$22 per unit |
10. | Machinery depreciation, straight-line$46,000 |
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.)
Cost by Behavior | Cost by Function | ||||
Costs | Variable | Fixed | Product | Period | |
1. | Plastic for Casing | $20,000 | $20,000 | ||
2. | Wages of Assembly Workers | ||||
3. | Property Taxes on Factory | ||||
4. | Accounting Staff Salaries | ||||
5. | Drum Stands | ||||
6. | Rent Cost of Equipment for Sales Staff | ||||
7. | Upper Management Salaries | ||||
8. | Annual Flat Fee for Factory Maintenance Service | ||||
9. | Sales Commissions | ||||
10. | Machinery Depreciation, Straight-Line |
2. Calculate the manufacturing cost per drum set.
True Beat Calculation of Manufacturing Cost per Drum Set For Year Ended December 31, 2017 | |||
Item | Total Cost | Per Unit Cost |
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Variable Production Costs |
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Total Variable Production Costs |
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Fixed Production Costs |
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Total Fixed Product Costs |
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Total Production Cost | $ | $ |
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