Listed here are the total costs associated with the 2013 production of 1,000 drum sets manufactured by DrumBeat. The drum sets sell for S500 each.

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 outsourced)?$26,000

6. Rent cost of equipment for sales staff? $10,000

7. Upper management salaries????? $125,000

8. Annual flat fee for 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.)

Transcribed Image Text:

Costs 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 paid for maintenance service 9. Sales commissions 10. Machinery depreciation, straight-line $ Cost by Behavior Variable 17,000 Fixed $ Cost by Function Product 17,000 Period Costs 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 paid for maintenance service 9. Sales commissions 10. Machinery depreciation, straight-line $ Cost by Behavior Variable 17,000 Fixed $ Cost by Function Product 17,000 Period

Answer rating: 100% (QA)

Product cost as defined in Lizards and Tryfonidis 2011 are those costs that are direct... View the full answer