Bell Company a manufacturing of audio systems, started its production 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 hour to complete. In addition, the rent on the equipment used to assemble audio system 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 cost 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.

Instructions

(a) Create an answer sheet with the following column headings

Product Cost

Cost Direct Material Manufacturing Period

Item Labor Overhead Cost

Assuming that Bell Manufacturing on average, 1,500 audio system 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

(b) Compute the cost to produce one audio system.