Required information Problem 1-1A Cost computation, classification, and analysis

Question

Required information Problem 1-1A Cost computation, classification, and analysis LO C2, C3 The following information applies to the questions displayed below.] Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $494 each. osts 1. Plastic for casing-$17,000 2. Wages of assembly workers-$84,000 3. Property taxes on factory-$6,000 4. Accounting staff salaries-$34,000 5. Drum stands (1,000 stands purchased)-$29,000 6. Rent cost of equipment for sales staff-$24,000 7. Upper management salaries-$185,000 8. Annual flat fee for factory maintenance service-$18,000 9. Sales commissions-$20 per unit 10. Machinery depreciation, straight-line-$36,000 roblem 1-1A Part 1 equired: Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as a xample.)

Explanation / Answer

Solution 1:

Classification of Cost - True Beat S no Costs Cost by Behavior Cost by Function Variable Fixed Product Period 1 Plastic for casing $17,000.00 $17,000.00 2 Wages for assembly workers $84,000.00 $84,000.00 3 Property taxes on factory $6,000.00 $6,000.00 4 Accounting staff salaries $34,000.00 $34,000.00 5 Drum Stands $29,000.00 $29,000.00 6 Rent cost of equipment for sales staff $24,000.00 $24,000.00 7 Upper management salaries $185,000.00 $185,000.00 8 Annual flat fee for factory maintenance service $18,000.00 $18,000.00 9 Sales Commission $20,000.00 $20,000.00 10 Machinery Depreciation, staright line $36,000.00 $36,000.00

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