Paragraph Styles P19.2A (Pg. 19-36) P19.2A (LO 2) Bell Company, a manufacturer of audio systems, started its production in October 2020. 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. Classifty manufacturing costs into different categories and compute the unit cost. Raw material costs for an audio system will total $74 per unit. Workers on the production lines are on average paid $12 per hour. An audio system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $4,900 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,000. Factory janitorial costs are $1,300 monthly. Advertising costs for the audio system will be $9,500 per month. The factory building depreciation expense is $7,800 per year. Property taxes on the factory building will be $9,000 per year. Instructions •a. Prepare an answer sheet with the following column headings. Product Costs Cost Direct Direct Manufacturing Overhead Period Item Materials Labor Costs • Assuming that Bell manufactures, on average, 1,500 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. •b. Compute the cost to produce one audio system. DM $111,000 DL $ 90,000 MO $ 18,100 PC $ 9,500
Paragraph Styles P19.2A (Pg. 19-36) P19.2A (LO 2) Bell Company, a manufacturer of audio systems, started its production in October 2020. 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. Classifty manufacturing costs into different categories and compute the unit cost. Raw material costs for an audio system will total $74 per unit. Workers on the production lines are on average paid $12 per hour. An audio system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $4,900 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,000. Factory janitorial costs are $1,300 monthly. Advertising costs for the audio system will be $9,500 per month. The factory building depreciation expense is $7,800 per year. Property taxes on the factory building will be $9,000 per year. Instructions •a. Prepare an answer sheet with the following column headings. Product Costs Cost Direct Direct Manufacturing Overhead Period Item Materials Labor Costs • Assuming that Bell manufactures, on average, 1,500 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. •b. Compute the cost to produce one audio system. DM $111,000 DL $ 90,000 MO $ 18,100 PC $ 9,500
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P19.2A (Pg. 19-36)
P19.2A (LO 2) Bell Company, a manufacturer of audio systems, started its
production in October 2020. 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.
Classify manufacturing costs into different categories and compute the unit cost.
Raw material costs for an audio system will total $74 per unit. Workers on the
production lines are on average paid $12 per hour. An audio system usually takes 5
hours to complete. In addition, the rent on the equipment used to assemble audio
systems amounts to $4,900 per month. Indirect materials cost $5 per system. A
supervisor was hired to oversee production; her monthly salary is $3,000.
Factory janitorial costs are $1,300 monthly. Advertising costs for the audio system
will be $9,500 per month. The factory building depreciation expense is $7,800 per
year. Property taxes on the factory building will be $9,000 per year.
Instructions
•a. Prepare an answer sheet with the following column headings.
Product Costs
Manufacturing
Overhead
Cost
Direct
Direct
Period
Item
Materials
Labor
Costs
Assuming that Bell manufactures, on average, 1,500 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.
•b. Compute the cost to produce one audio system.
DM $111,000
DL $ 90,000
MO $ 18,100
PC $ 9,500
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