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Splish Brothers Company has been a retailer of audio systems for the past 3 years. However, after a thorough survey of audio system markets Spish Brothers decided to turn its retail store into an audio equipment factory Production began October 1.2025 Direct materials costs for an audio system total $75 per unit Workers on the production lines are paid $15 per hour. An audio system takes 7 labor hours to complets. In addition, the rent on the equipment used to assemble audio systems amounts to $5,960 per month Indirect materials cost $7 per system A superviser Nired to oversee production her monthly salary is $3.000 Factory janitorial costs are $2.390 monthly Advertising costs for the audio system will be $9,330 per month The factory building depreciation is $7,080 per year Property taxes on the factory building will be $8.400 per year (a) Assuming that Solish Brothers 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 colum Product Costs Direct Labor Coste Direct materials Wages for workers Rent on equipment Indirect materials Direct Materials 10000 Manufacturing Overhead

Splish Brothers Company has been a retailer of audio systems for the past 3 years. However, after a thorough survey of audio system markets Spish Brothers decided to turn its retail store into an audio equipment factory Production began October 1.2025 Direct materials costs for an audio system total $75 per unit Workers on the production lines are paid $15 per hour. An audio system takes 7 labor hours to complets. In addition, the rent on the equipment used to assemble audio systems amounts to $5,960 per month Indirect materials cost $7 per system A superviser Nired to oversee production her monthly salary is $3.000 Factory janitorial costs are $2.390 monthly Advertising costs for the audio system will be $9,330 per month The factory building depreciation is $7,080 per year Property taxes on the factory building will be $8.400 per year (a) Assuming that Solish Brothers 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 colum Product Costs Direct Labor Coste Direct materials Wages for workers Rent on equipment Indirect materials Direct Materials 10000 Manufacturing Overhead

FINANCIAL ACCOUNTING
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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### Splash Brothers Company Audio System Manufacturing Case Study **Background:** Splash Brothers Company has been a retailer of audio systems for the past 3 years. However, after a thorough survey of audio system markets, Splash Brothers decided to transition from retail into an audio equipment factory. Production began on October 1, 2025. **Production Costs:** Direct materials costs for an audio system total $25 per unit. Workers on the production line are paid $15 per hour. An audio system takes 7 labor hours to complete. Additionally, the rent on the factory building is $2,000 per month. Factory supervisors oversee the production process, with a supervisor's salary set at $3,000 per month. Indirect materials cost $7 per system. A supervisor who does not oversee production has an hourly salary of $14.00. **Factory Overhead:** - Monthly indirect labor costs are $2,300. - Advertising costs for the audio system will be $1,200 per month. - The factory building depreciation is $750.00 per year. - Property taxes on the factory building will be $8,400 per year. **Tasks:** (a) Assuming that Splash Brothers manufactures, on average, 1,500 audio systems per month, enter each cost item in the given table, placing the dollar amount per month under the appropriate heading. Locate the dollar amounts in each of the columns. #### Product Costs | Cost Items | Direct Materials | Direct Labor | Manufacturing Overhead | |-----------------------------------|------------------|--------------|-----------------------| | Direct materials | $ | $ | $ | | Wages for workers | $ | $ | $ | | Rent on equipment | $ | $ | $ | | Indirect materials | $ | $ | $ | | Factory supervisor’s salary | $ | $ | $ | | Janitorial costs | $ | $ | $ | | Advertising | $ | $ | $ | | Depreciation on factory building | $ | $ | $ | | Property taxes on factory building| $ | $ | $ | Please calculate the respective costs accurately based on given data. ### Detailed Explanations The purpose here is to allow students or other interested individuals to understand the breakdown of manufacturing costs in a production setup and how to allocate them
Transcribed Image Text:### Splash Brothers Company Audio System Manufacturing Case Study **Background:** Splash Brothers Company has been a retailer of audio systems for the past 3 years. However, after a thorough survey of audio system markets, Splash Brothers decided to transition from retail into an audio equipment factory. Production began on October 1, 2025. **Production Costs:** Direct materials costs for an audio system total $25 per unit. Workers on the production line are paid $15 per hour. An audio system takes 7 labor hours to complete. Additionally, the rent on the factory building is $2,000 per month. Factory supervisors oversee the production process, with a supervisor's salary set at $3,000 per month. Indirect materials cost $7 per system. A supervisor who does not oversee production has an hourly salary of $14.00. **Factory Overhead:** - Monthly indirect labor costs are $2,300. - Advertising costs for the audio system will be $1,200 per month. - The factory building depreciation is $750.00 per year. - Property taxes on the factory building will be $8,400 per year. **Tasks:** (a) Assuming that Splash Brothers manufactures, on average, 1,500 audio systems per month, enter each cost item in the given table, placing the dollar amount per month under the appropriate heading. Locate the dollar amounts in each of the columns. #### Product Costs | Cost Items | Direct Materials | Direct Labor | Manufacturing Overhead | |-----------------------------------|------------------|--------------|-----------------------| | Direct materials | $ | $ | $ | | Wages for workers | $ | $ | $ | | Rent on equipment | $ | $ | $ | | Indirect materials | $ | $ | $ | | Factory supervisor’s salary | $ | $ | $ | | Janitorial costs | $ | $ | $ | | Advertising | $ | $ | $ | | Depreciation on factory building | $ | $ | $ | | Property taxes on factory building| $ | $ | $ | Please calculate the respective costs accurately based on given data. ### Detailed Explanations The purpose here is to allow students or other interested individuals to understand the breakdown of manufacturing costs in a production setup and how to allocate them
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