Listed here are the total costs associated with the 2015 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $508 each.
Costs
1. Plastic for casing—$21,000
2. Wages of assembly workers—$90,000.
3. Property taxes on factory—$5,000
4. Accounting staff salaries—$34,000
5. Drum stands (1,000 stands purchased)—$28,000
6. Rent cost of equipment for sales staff—$48,000
7. Upper management salaries—$180,000
8. Annual flat fee for factory maintenance service—$14,000
9. Sales commissions—$16 per unit
10. Machinery depreciation, straight-line—$43,000
Required:
1.
Classify each cost and its amount as (a) either variable or fixed and (b) either product or period.
2. Calculate the manufacturing cost per drum set.
