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

For Specific Date For Year 2017

Work-in-process inventory, Jan. 1, 2017 $18 Plant utilities $10

Direct materials inventory, Dec. 31, 2017 8 Indirect manufacturing labor 29

Finished goods inventory, Dec. 31, 2017 15 Depreciation"plant and equipment 5

Accounts payable, Dec. 31, 2017 30 Revenues 353

Accounts receivable, Jan. 1, 2017 57 Miscellaneous manufacturing overhead 14

Work-in-process inventory, Dec. 31, 2017 1 Marketing, distribution, and customer-service costs 96

Finished goods inventory, Jan 1, 2017 41 Direct materials purchased 84

Accounts receivable, Dec. 31, 2017 40 Direct manufacturing labor 39

Accounts payable, Jan. 1, 2017 44 Plant supplies used 7

Direct materials inventory, Jan. 1, 2017 32 Property taxes on plant 6

Calendar's manufacturing costing system uses athree-part classification of directmaterials, direct manufacturinglabor, and manufacturing overhead costs.

1.

Calculate total prime costs and total conversion costs.

2.

Calculate total inventoriable costs and period costs.

3.

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

4.

Suppose that both the direct materials used and the depreciation on plant and equipment are related to the manufacture of 1 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 astraight-line basis.

5.

Assume that the impliedcost-behavior patterns in requirement 4 persist. Thatis, direct material costs behave as a variable cost and depreciation on plant and equipment behaves as a fixed cost. Repeat the computations in requirement4, assuming that the costs are being predicted for the manufacture of 2 million units of product. Determine the effect on total costs.

6.

Assume that depreciation on the equipment(but not theplant) is computed based on the number of units produced because the equipment deteriorates with units produced. The depreciation rate on equipment is $4.00 per unit. Calculate the depreciation on equipment assuming(a) 1 million units of product are produced and(b) 2 million units of product are produced.