Question
The accountant at Company Alpha is having some trouble crunching the numbers and has asked for help with the cost items listed below. Cost item
The accountant at Company Alpha is having some trouble crunching the numbers and has asked for help with the cost items listed below.
Cost item | Value |
Rent of office | $40,000 |
Office manager salary | $80,000 |
Marketing costs | $15,000 |
Invoicing system | $750 |
Rent of warehouse | $30,000 |
Warehouse supervisor salary | $70,000 |
Direct material | $40,000 |
Direct manufacturing labour | $15,000 |
Required:
- Complete the table below classifying all the costs items listed above between (i) fixed or variable, (ii) direct or indirect, and (iii) product cost or period cost. (5 marks)
Cost item | Fixed/variable | Direct/indirect | Product/Period |
Rent of office |
|
|
|
Office manager salary |
|
|
|
Marketing costs |
|
|
|
Invoicing system |
|
|
|
Rent of warehouse |
|
|
|
Warehouse supervisor salary |
|
|
|
Direct material |
|
|
|
Direct manufacturing labour |
|
|
|
Considering that Company Alpha only produces one good and that 1,000 units of this good was sold, calculate the total product cost and unit average product cost.
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