Boss Company, a manufacturer of headphones, started its production in month of May 2020. Raw materials cost for a headphone will total $40 per unit. Workers on the production lines are on average paid $12 per hour. A headphone usually takes 4 hours to complete. In addition, the rent on the equipment used to assemble phones amounts to $7,200 per month. Indirect materials cost $4 per headphone. A supervisor was hired to oversee production; her monthly salary is $2,500. Factory Cleaning costs are $1,000 monthly. Advertising costs to sell headphones will be 9,500 per month. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $10,800 per year. Depreciation of the office building is $6,000 per annum. Boss manufactures, on average, 1400 headphones per month, Instructions: (a) Prepare an answer sheet with the following column headings for Product and Period cost. (b) Compute the cost to produce one headphone. Cost items Direct Material Product cost Period Cost Direct Labor Manufacturing Overheads

Boss Company, a manufacturer of headphones, started its production in month of May 2020. Raw materials cost for a headphone will total $40 per unit. Workers on the production lines are on average paid $12 per hour. A headphone usually takes 4 hours to complete. In addition, the rent on the equipment used to assemble phones amounts to $7,200 per month. Indirect materials cost $4 per headphone. A supervisor was hired to oversee production; her monthly salary is $2,500. Factory Cleaning costs are $1,000 monthly. Advertising costs to sell headphones will be 9,500 per month. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $10,800 per year. Depreciation of the office building is $6,000 per annum. Boss manufactures, on average, 1400 headphones per month, Instructions: (a) Prepare an answer sheet with the following column headings for Product and Period cost. (b) Compute the cost to produce one headphone. Cost items Direct Material Product cost Period Cost Direct Labor Manufacturing Overheads

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Description: Question 2:Boss Company, a manufacturer of headphones, startedits production in month of May 2020.Raw materials cost for a headphone will total $40 perunit. Workers on the production lines are on averagepaid $12 per hour. A headphone usually takes 4

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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