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Bonzo's Boards makes reasonably high-end skateboards which sell for $400 each. The production process is fairly simple and involves assembling components purchased from various suppliers.
Bonzo's Boards makes reasonably high-end skateboards which sell for $400 each. The production process is fairly simple and involves assembling components purchased from various suppliers. Since each skateboard only takes one hour to assemble, there is essentially no work-in-process inventory. Bonzo's Boards has the capacity to make 2,000 skateboards per year. Costs for the skateboard components are: Deck $40.00 Trucks Wheels Bearings Bolts, etc. Hardware package - net $45.00 40.00 25.00 10.00 120.00 $160.00 Total Each board should take one hour of direct labor to assemble. Direct labor wages are $50 per hour. Other manufacturing costs on a monthly basis are: Rent Insurance Utilities Miscellaneous $2,700.00 500.00 200.00 300.00 $3,700.00 Inventory balances are as follows (Bonzo's uses FIFO inventory cost flow assumption): Units 250 Dollars $10,000 Decks 1/1/2020 12/31/2020 360
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