Bell Company, a manufacturer of audio systems, started its production in October

Question

Bell Company, a manufacturer of audio systems, started its production in October 2012. 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 $76 per unit. Workers on the production lines are on average paid $14 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 $5,823 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,189.

Factory janitorial costs are $1,498 monthly. Advertising costs for the audio system will be $9,231 per month. The factory building depreciation expense is $6,732 per year. Property taxes on the factory building will be $9,480 per year. Bell Company, a manufacturer of audio systems, started its production in October 2012. 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 $76 per unit. Workers on the production lines are on average paid $14 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 $5,823 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,189.

Factory janitorial costs are $1,498 monthly. Advertising costs for the audio system will be $9,231 per month. The factory building depreciation expense is $6,732 per year. Property taxes on the factory building will be $9,480 per year. Product Costs
Cost Item Direct
Materials Direct
Labor Manufacturing
Overhead Period
Costs Problem 14-2A Bell Company, a manufacturer of audio systems, started its production in October 2012. 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 $76 per unit. Workers on the production lines are on average paid $14 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 $5,823 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,189.

Factory janitorial costs are $1,498 monthly. Advertising costs for the audio system will be $9,231 per month. The factory building depreciation expense is $6,732 per year. Property taxes on the factory building will be $9,480 per year.

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