Ayayai Company, a manufacturer of audio systems, started its production in October 2022. For the preceding 3 years, Ayayai had been a retailer of audio systems. After a thorough survey of audio system markets, Ayayai decided to turn its retail store into an audio equipment factory. Raw material costs for an audio system will total $75 per unit. Workers on the production lines are on average paid $13 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 $5,000 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,800. Factory janitorial costs are $1,400 monthly. Advertising costs for the audio system will be $8,600 per month. The factory building depreciation expense is $6,000 per year. Property taxes on the factory building will be $8,400 per year. (a) Assuming that Ayayai 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. $ Direct Materials Product Costs Direct Labor $ Manufacturing Overhead SA $ $ Period Costs
Ayayai Company, a manufacturer of audio systems, started its production in October 2022. For the preceding 3 years, Ayayai had been a retailer of audio systems. After a thorough survey of audio system markets, Ayayai decided to turn its retail store into an audio equipment factory. Raw material costs for an audio system will total $75 per unit. Workers on the production lines are on average paid $13 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 $5,000 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,800. Factory janitorial costs are $1,400 monthly. Advertising costs for the audio system will be $8,600 per month. The factory building depreciation expense is $6,000 per year. Property taxes on the factory building will be $8,400 per year. (a) Assuming that Ayayai 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. $ Direct Materials Product Costs Direct Labor $ Manufacturing Overhead SA $ $ Period Costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ayayai Company, a manufacturer of audio systems, started its production in October 2022. For the preceding 3 years, Ayayai had been
a retailer of audio systems. After a thorough survey of audio system markets, Ayayai decided to turn its retail store into an audio
equipment factory.
Raw material costs for an audio system will total $75 per unit. Workers on the production lines are on average paid $13 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
$5,000 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,800.
Factory janitorial costs are $1,400 monthly. Advertising costs for the audio system will be $8,600 per month. The factory building
depreciation expense is $6,000 per year. Property taxes on the factory building will be $8,400 per year.
(a)
Assuming that Ayayai 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.
$
Direct
Materials
Product Costs
Direct
Labor
$
Manufacturing
Overhead
SA
$
$
Period
Costs
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