I need help on the following question. [The following information applies to the

Question

I need help on the following question.

[The following information applies to the questions displayed below. Listed here are the total costs associated with the 2015 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $503 each. Costs 1. Plastic for casing $20,000 2. Wages of assembly workers-$80,000 3. Property taxes on factory- $5,000 . Accounting staff salaries-$41,000 5. Drum stands (1,000 stands purchased)-$39,000 6. Rent cost of equipment for sales staff-$24,000 7. Upper management salaries-$175,000 8. Annual flat fee for factory maintenance service-$20,000 9. Sales commissions-$17 per unit 10. Machinery depreciation, straight-line-$45,000

Explanation / Answer

Solution.

1. Clasification of costs.

2. Calculation of manufectureing cost per drum set.

Cost By Behavior Cost By Function Costs Variable Fixed Product Period Plastic For casing                     20,000                     20,000 Wages for assembly worker                     80,000                     80,000 Property taxes on factory                5,000                         5,000 Accounting staff salary              41,000                      41,000 Drum stands                     39,000                     39,000 Rent cost of equipment for sales staff              24,000                      24,000 Upper management salaries           175,000                    175,000 Annual flat fee for factory maintenance service              20,000                      20,000 Sales comissions                     17,000                      17,000 Machinery depreciation,Straight line              45,000                     45,000 Total                   156,000           310,000                  184,000                    282,000

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