Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $510 each. Costs 1. Plastic for casing—$17,000 2. Wages of assembly workers—$86,000 3. Property taxes on factory—$6,000 4. Accounting staff salaries—$36,000 5. Drum stands (1,000 stands purchased)—$31,000 6. Rent cost of equipment for sales staff—$48,000 7. Upper management salaries—$170,000 8. Annual flat fee for factory maintenance service—$13,000 9. Sales commissions—$20 per unit 10. Machinery depreciation, straight-line—$45,000 Required: 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.)
Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $510 each. Costs 1. Plastic for casing—$17,000 2. Wages of assembly workers—$86,000 3. Property taxes on factory—$6,000 4. Accounting staff salaries—$36,000 5. Drum stands (1,000 stands purchased)—$31,000 6. Rent cost of equipment for sales staff—$48,000 7. Upper management salaries—$170,000 8. Annual flat fee for factory maintenance service—$13,000 9. Sales commissions—$20 per unit 10. Machinery depreciation, straight-line—$45,000 Required: 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $510 each.
| Costs | |
| 1. | Plastic for casing—$17,000 |
| 2. | Wages of assembly workers—$86,000 |
| 3. | Property taxes on factory—$6,000 |
| 4. | Accounting staff salaries—$36,000 |
| 5. | Drum stands (1,000 stands purchased)—$31,000 |
| 6. | Rent cost of equipment for sales staff—$48,000 |
| 7. | Upper management salaries—$170,000 |
| 8. | Annual flat fee for factory maintenance service—$13,000 |
| 9. | Sales commissions—$20 per unit |
| 10. | Machinery |
Required:
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.)
|
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