ell 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 $77per unit. Workers on the production lines are on average paid $14per hour. An audio system usually takes5hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,310per month. Indirect materials cost $6per system. A supervisor was hired to oversee production; her monthly salary is $3,800.

Factory janitorial costs are $1,640monthly. Advertising costs for the audio system will be $9,230per month. The factory building depreciation expense is $6,960per year. Property taxes on the factory building will be $8,640per year.

(a)

Assuming that Bell manufactures, on average,1,440audio 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

$

$

$

$