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Bell Company, a manufacturer of audio systems, started its production in October 2017. For the preceding...

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. New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct. 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. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Raw 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 $ $ $ $ eTextbook and Media Incorrect answer iconYour answer is incorrect. Compute the cost to produce one audio system. (Round answer to 2 decimal places, e.g. 15.25.) Production cost per system $

Solutions

Expert Solution

Product Costs
Direct Materials Direct Labor Manufacturing Overhead Period Costs
Raw materials 111000
Wages for workers 90000
Rent on equipment 4900
Indirect materials 7500
Factory supervisor’s salary 3000
Janitorial costs 1300
Advertising 9500
Depreciation on factory building 650
Property taxes on factory building 750
Total 111000 90000 18100 9500
2
Production cost per system 146.07 =(111000+90000+18100)/1500
Workings:
Raw materials 111000 =1500*74
Wages for workers 90000 =1500*5*12
Indirect materials 7500 =1500*5
Depreciation on factory building 650 =7800/12
Property taxes on factory building 750 =9000/12

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