Bell Company, a manufacturer of audio systems, started its production in October 2020. 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 material costs for an audio system will total $75 per unit. Workers on the production lines are on average paid $15 per hour. An audio system usually takes 7 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,100 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,800. Factory janitorial costs are $1,400 monthly. Advertising costs for the audio system will be $8,800 per month. The factory building depreciation expense is $7,200 per year. Property taxes on the factory building will be $9,600 per year.

(a)

Assuming that Bell manufactures, on average, 1,000 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 supervisors salary
Janitorial costs
Advertising
Depreciation on factory building
Property taxes on factory building
		$		$		$