Question
Shamrock Company has been a retailer of audio systems for the past 3 years. However, after a thorough survey of audio system markets, Shamrock decided
Shamrock Company has been a retailer of audio systems for the past 3 years. However, after a thorough survey of audio system markets, Shamrock decided to turn its retail store into an audio equipment factory. Production began October 1, 2022.
Direct materials costs for an audio system total $75 per unit. Workers on the production lines are paid $14 per hour. An audio system takes 5 labor hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,320 per month. Indirect materials cost $7 per system. A supervisor was hired to oversee production; her monthly salary is $3,710.
Factory janitorial costs are $1,570 monthly. Advertising costs for the audio system will be $9,130 per month. The factory building depreciation is $6,240 per year. Property taxes on the factory building will be $8,400 per year.
Assuming that Shamrock manufactures, on average, 1,500 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.
Direct Materials Direct Labor Manufacturing Overhead Cost Item Direct materials $ $ $ Wages for workers Rent on equipment Indirect materials Factory supervisor's salary Janitorial costs Advertising Depreciation on factory building Property taxes on factory building $ $ $ Manufacturing Overhead Period Costs $ $ $ $ $
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