[The following information applies to the questions displayed below.] Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each. Costs 1. Plastic for casing—$17,000 2. Wages of assembly workers—$82,000 3. Property taxes on factory—$5,000 4. Accounting staff salaries—$35,000 5. Drum stands (1,000 stands purchased)—$26,000 6. Rent cost of equipment for sales staff—$10,000 7. Upper management salaries—$125,000 8. Annual flat fee for factory maintenance service—$10,000 9. Sales commissions—$15 per unit 10. Machinery depreciation, straight-line—$40,000 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.) Cost by Behavior Cost by Function Costs Variable Fixed Product Period 1. Plastic for casing 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.]

Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each.

	Costs
1.	Plastic for casing—$17,000
2.	Wages of assembly workers—$82,000
3.	Property taxes on factory—$5,000
4.	Accounting staff salaries—$35,000
5.	Drum stands (1,000 stands purchased)—$26,000
6.	Rent cost of equipment for sales staff—$10,000
7.	Upper management salaries—$125,000
8.	Annual flat fee for factory maintenance service—$10,000
9.	Sales commissions—$15 per unit
10.	Machinery depreciation, straight-line—$40,000

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.)

		Cost by Behavior	Cost by Function
	Costs	Variable	Fixed	Product	Period
1.	Plastic for casing
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

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