Question
Al Watan Manufacturer Company, a manufacturer of light, started its production in month of May 2020. Raw materials cost for a light will total $85
- Al Watan Manufacturer Company, a manufacturer of light, started its production in month of May 2020.
Raw materials cost for a light will total $85 per unit. Workers on the production lines are on average paid $15 per hour. A light usually takes 6 hours to complete.
In addition, the rent on the equipment used to assemble light amounts to $8000 per month. Indirect materials cost $4 per phone. A supervisor was hired to oversee production; her monthly salary is $5,500. Factory Cleaning costs are $3,500 monthly.
Advertising costs to sell light will be 18,500 per month. The factory building depreciation expense is $200 per month. Property taxes on the factory building will be $10800 per year. Depreciation of the office building is $10800 per annum.
Al Watan manufactures Company, on average, 1000 light per month,
Required:
- Prepare an answer sheet with the following column headings for Product and Period cost (4marks)
- Compute the cost to produce one unit (1mark) Do proper working for calculation
Cost items | Product cost | Period Cost | ||
| Direct Material | Direct Labor | Manufacturing Overheads |
|
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