6.Ibri Company, a manufacturer of stereo systems, started itsproduction in January 2018. For the preceding 3 years had been aretailer of stereo systems. After a thorough survey of stereo systemmarkets, Ibri Company decided to turn its retail store into a stereoequipment factory. Raw materials cost for a stereo system will total$77 per unit. Workers on the production lines are on average paid$11 per hour. A stereo system usually takes 4 hours to complete. Inaddition, the rent on the equipment used to assemble stereo systemsamounts to $5,200 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 $1,000 monthly. Advertisingcosts for the stereo system will be $5,000 per month. The factorybuilding depreciation expense is $8,400 per year. Property taxes onthe factory building will be $12,000 per year.Instructions(a) Prepare an answer sheet with the following column headings.Cost Items Direct Material Direct Labor Manufacturing Period CostsOverheadAssuming that Ibri Company manufactures, on average, 1,000stereo systems per month, enter each cost item on your answersheet, placing the dollar amount per month under theappropriate headings. Total the dollar amounts in each of thecolumns.(b) Compute the cost to produce one stereo system.

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Description: 6.Ibri Company, a manufacturer of stereo systems, started itsproduction in January 2018. For the preceding 3 years had been aretailer of stereo systems. After a thorough survey of stereo systemmarkets, Ibri Company decided to turn its retail store i

Business

Accounting

(a) Prepare an answer sheet with the following column headings. Cost Items Direct Material Direct Labor Manufacturing Period Costs Overhead Assuming that Ibri Company manufactures, on average, 1,000 stereo 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 stereo system.

(a) Prepare an answer sheet with the following column headings. Cost Items Direct Material Direct Labor Manufacturing Period Costs Overhead Assuming that Ibri Company manufactures, on average, 1,000 stereo 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 stereo system.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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