Heritage Company manufactures a beautiful bookcase that is v

Heritage Company manufactures a beautiful bookcase that is very popular. The company has sufficient demand to keep production going indefinitely at the plant\'s full capacity of 5,500 bookcases per year Annual cost data at full capacity follow: Direct materials used (wood and glass) General office salaries Factory supervision Sales commissions Depreciation, factory building Depreciation, office equipment Indirect materials, factory Factory labour (cutting and assembly) Advertising Insurance, factory General office supplies (billing) Property taxes, factory Utilities, factory $437,500 111,500 80,500 63,000 113,250 2,450 19,500 97,500 115,000 6,750 5,050 23,000 52,500 Required 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as either variable or fixed with respect to the number of units produced and sold and, second, as either a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) Selling or Administrative Cost Cost Behavior Product Cost Cost Item Variable Fixed Direct Indirect Direct materials used (wood and ass General office salaries Factory supervision Sales commissions Depreciation, factory building Depreciation, office equipment Indirect materials, factory Factory labour (cutting and assembly) Advertising Insurance, factory General office supplies (billing) Property taxes, factory Utilities, factory Total costs 0

Solution

Cost Behaviour Selling or Administrative Cost Product Cost Cost Item Variable Fixed Direct Indirect Direct materials used (wood and glass) 437500 437500 General office salaries 111500 111500 Factory supervision 80500 80500 Sales commissions 63000 63000 Depreciation, factory building 113250 113250 Depreciation, office equipment 2450 2450 Indirect materials, factory 19500 19500 Factory labor (cutting and assembly) 97500 97500 Advertising 115000 115000 Insurance, factory 6750 6750 General office supplies (billing) 5050 5050 Property taxes, factory 23000 23000 Utilities, factory 52500 52500 Total costs $ 675050 452450 297000 535000 295500