Listed here are the total costs associated with the 2013 production of 1,000 drum sets manufactured by DrumBeat. The drum sets sell for $ 500 each.

Required
1. Classify each cost and its amount as
(a) Either variable or fixed
(b) Either product or period. (The first cost is completed as an example.)
2. Compute the manufacturing cost per drum set.
Analysis Component
3. Assume that 1,200 drum sets are produced in the next year. What do you predict will be the total cost of plastic for the casings and the per unit cost of the plastic for the casings? Explain.
4. Assume that 1,200 drum sets are produced in the next year. What do you predict will be the total cost of property taxes and the per unit cost of the property taxes?Explain.

Transcribed Image Text:

Cost by Behavior Cost by Function Variable Fixed Product Period $17000_ Costs $17,000 3. Property taxes on factory $5,000 4. Accounting staff salaries $35,000 5. Drum stands (1.000 stands outsourced) -$26,000 6. Rent cost of equipment for sales staff $10,000 7. Upper management sal 8. Annual flat fee for maintenance service-$10,000 . ._ , . aries-$125,000*.. 10. Machinery depreciation, straight-line $40.000.