The following items (in millions) pertain to Calvin Corporation:

For Specific Date			For Year 2017
Work-in-process inventory, Jan. 1, 2017	$19		Plant utilities	$10
Direct materials inventory, Dec. 31, 2017	7		Indirect manufacturing labor	30
Finished goods inventory, Dec. 31, 2017	12		Depreciationplant and equipment	9
Accounts payable, Dec. 31, 2017	20		Revenues	352
Accounts receivable, Jan. 1, 2017	55		Miscellaneous manufacturing overhead	20
Work-in-process inventory, Dec. 31, 2017	8		Marketing, distribution, and customer-service costs	97
Finished goods inventory, Jan 1, 2017	41		Direct materials purchased	89
Accounts receivable, Dec. 31, 2017	30		Direct manufacturing labor	47
Accounts payable, Jan. 1, 2017	43		Plant supplies used	4
Direct materials inventory, Jan. 1, 2017	32		Property taxes on plant	5

Partial Schedule of Cost of Goods Manufactured
(in millions)
Direct materials used	$114
Direct manufacturing labor costs	47
Total indirect manufacturing overhead costs	78
Manufacturing costs incurred during 2017	239
Add: Beginning work-in-process inventory, Jan. 1, 2017	19
Total manufacturing costs to account for	258
Less: Ending work-in-process inventory, Dec. 31, 2017	8
Cost of goods manfactured	$250

1. Calculate total prime costs and total conversion costs.

2.Calculate total inventoriable costs and period costs.

3.Design costs and R&D costs are not considered product costs for financial statement purposes. When might some of these costs be regarded as product costs? Give an example.

4.Suppose that both the direct materials used and the depreciation on plant and equipment are related to the manufacture of 3 million units of product. Determine the unit cost for the direct materials assigned to those units and the unit cost for depreciation on plant and equipment. Assume that yearly depreciation is computed on a straight-line basis.

5.Assume that the implied cost-behavior patterns in requirement 4 persist. That is, direct material costs behave as a variable cost and depreciation on plant and equipment behaves as a fixed cost. Repeat the computations in requirement 4, assuming that the costs are being predicted for the manufacture of 4 million units of product. Determine the effect on total costs.

6. Assume that depreciation on the equipment (but not the plant) is computed based on the number of units produced because the equipment deteriorates with units produced. The depreciation rate on equipment is $8.00 per unit. Calculate the depreciation on equipment assuming (a) 3 million units of product are produced and (b) 4 million units of product are produced.