Listed here are the total costs associated with the 2011 production of 1,000 dru

Question

Listed here are the total costs associated with the 2011 production of 1,000 drum sets manufactured by NeatBeat. The drum sets sell for $300 each. (Assume there is no ending inventory in the year 2011.)

  

Costs 1. Plastic for casing%u2014$12,000 2. Wages of assembly workers%u2014$60,000. 3. Property taxes on factory%u2014$6,000 4. Accounting staff salaries %u2014 $45,000 5. Drum stands (1,000 stands outsourced)%u2014$25,000 6. Rent cost of equipment for sales staff%u2014$7,000 7. Upper management salaries%u2014$100,000 8. Annual flat fee for maintenance service%u2014$9,000 9. Sales commissions%u2014$10 per unit 10.
Machinery depreciation%u2014$10,000

Explanation / Answer

Total Manufacturing Costs = $122,000 122,000 / 1,000 = $122 per drum set

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