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Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $541 each.

Costs
1.	Plastic for casing—$19,000
2.	Wages of assembly workers—$86,000
3.	Property taxes on factory—$7,000
4.	Accounting staff salaries—$38,000
5.	Drum stands (1,000 stands purchased)—$35,000
6.	Rent cost of equipment for sales staff—$36,000
7.	Upper management salaries—$215,000
8.	Annual flat fee for factory maintenance service—$15,000
9.	Sales commissions—$21 per unit
10.	Machinery depreciation, straight-line—$38,000

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	$19,000		$19,000
2.	Wages of assembly workers	86,000
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

Answer 1

		Cost by Behaviour	Cost by Function
	Cost	variable	Fixed	Product	Period
1	Plastic for Casting	$19,000		$19,000
2	Wages of Assembly Workers	$86,000		$86,000
3	Property Taxes on Factory		$7,000	$7,000
4	Accounting Staff Salaries		$38,000		$38,000
5	Drum Stand	$35,000		$35,000
6	Rent cost of equipment for Sales staff		$36,000		$36,000
7	Upper Management Salaries		$215,000		$215,000
8	Annual flat fee for Factory maintenance service		$15,000	$15,000
9	Sales Commission (1000×$21)	$21,000			$21,000
10	Machinery Depreciation -Strightline		$38,000	$38,000