[The following information applies to the questions displayed below.] Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each. Costs 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 purchased)—$26,000 6. Rent cost of equipment for sales staff—$10,000 7. Upper management salaries—$125,000 8. Annual flat fee for factory 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.) Cost by Behavior Cost by Function Costs Variable Fixed Product Period 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 for factory maintenance service 9. Sales commissions 10. Machinery depreciation, straight-line

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

See similar textbooks

Required information

Skip to question

[The following information applies to the questions displayed below.]

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

	Costs
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 purchased)—$26,000
6.	Rent cost of equipment for sales staff—$10,000
7.	Upper management salaries—$125,000
8.	Annual flat fee for factory 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.)

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

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions