Required information Problem 11A Cost computation classifica

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 $482 each Costs 1. Plastic for casing-$18,890 2. Wages of assembly workers-$88,00 3. Property taxes on factory-$4,800 4. Accounting staff salaries-$39,e00 5. Drum stands (1,000 stands purchased)-$38,000 6. Rent cost of equipment for sales staff-$36,000 7. Upper management salaries-$155,0e 8. Annual flat fee for factory maintenance service-$19,0ee 9. Sales commissions-$21 per unit 10. Machinery depreciation, straight-line-$37,00e

Solution

DrumBeat

Calculation of Manufacturing Cost per Drum Set

For Year Ended December 31, 2017

Item

Total cost [1000 drum]

Per unit cost

Variable production costs

Plastic for casing

Wages of assembly workers

Drum stands

Total variable production costs

Fixed production costs

Property taxes on factory

Annual fee for maintenance service

Machinery depreciation

Total fixed production costs

Total production cost

DrumBeat
Calculation of Manufacturing Cost per Drum Set
For Year Ended December 31, 2017
Item	Total cost [1000 drum]	Per unit cost
Variable production costs
Plastic for casing	$                               18,000.00	$                  18.00
Wages of assembly workers	$                               88,000.00	$                  88.00
Drum stands	$                               38,000.00	$                  38.00
Total variable production costs	$                            144,000.00	$               144.00
Fixed production costs
Property taxes on factory	$                                 4,000.00	$                    4.00
Annual fee for maintenance service	$                               19,000.00	$                  19.00
Machinery depreciation	$                               37,000.00	$                  37.00
Total fixed production costs	$                               60,000.00	$                  60.00
Total production cost	$                            204,000.00	$               204.00
Accounting Staff Salary	39000	Admin Exp hence not considered for calculating production cost
Rent Cost of Equipment for sales staff	36000	Selling Expense
Upper Management Salary	155000	Admin Exp hence not considered for calculating production cost
Sales Commission	$21 pu	Selling Expense