Bell Company Bell Company, a manufacturer of audio systems, started its production in October 2017. 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 $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 Period Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead 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. 146.07
Bell Company Bell Company, a manufacturer of audio systems, started its production in October 2017. 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 $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 Period Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead 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. 146.07
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Help with part A and B
Transcribed Image Text:Bell Company
Bell Company, a manufacturer of audio systems, started its production in October 2017. 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 $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
Period Costs
Cost Item Direct Materials Direct Labor Manufacturing Overhead
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.
146.07
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education