Bell Company, a manufacturer of audio systems, started its production in October 2014. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory. Raw materials cost for an audio system will total $77 per unit. Workers on the production lines are on average paid $13 per hour. An audio system usually takes 7 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,356 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,688. Factory janitorial costs are $2,080 monthly. Advertising costs for the audio system will be $8,970 per month. The factory building depreciation expense is $7,104 per year. Property taxes on the factory building will be $9,456 per year. (a) Assuming that Bell manufactures, on average, 1,596 audio systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Raw materials (1) $ $ $ $ Wages for workers (2) Rent on equipment Indirect materials (3) Factory supervisor's salary Janitorial costs Advertising Depreciation on factory building (4) Property taxes on factory building (5) $ $
Bell Company, a manufacturer of audio systems, started its production in October 2014. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory.
Raw materials cost for an audio system will total $77 per unit. Workers on the production lines are on average paid $13 per hour. An audio system usually takes 7 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,356 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,688.
Factory janitorial costs are $2,080 monthly. Advertising costs for the audio system will be $8,970 per month. The factory building depreciation expense is $7,104 per year. Property taxes on the factory building will be $9,456 per year.
(a)Assuming that Bell manufactures, on average, 1,596 audio systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns.
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Period
Costs
Raw materials (1)
$
$
$
$
Wages for workers (2)
Rent on equipment
Indirect materials (3)
Factory supervisor's salary
Janitorial costs
Advertising
Depreciation on factory building (4)
Property taxes on factory building (5)
$
$
$
$