(a) Prepare an answer sheet with the following column headings. Cost Items Direct Material Direct Labor Manufacturing Period Costs Overhead Assuming that Ibri Company manufactures, on average, 1,000 stereo 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. (b) Compute the cost to produce one stereo system.
(a) Prepare an answer sheet with the following column headings. Cost Items Direct Material Direct Labor Manufacturing Period Costs Overhead Assuming that Ibri Company manufactures, on average, 1,000 stereo 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. (b) Compute the cost to produce one stereo system.
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
6. Ibri Company, a manufacturer of stereo systems, started its production in January 2018. For the preceding 3 years had been a retailer of stereo systems. After a thorough survey of stereo system markets, Ibri Company decided to turn its retail store into a stereo equipment factory. Raw materials cost for a stereo system will total $77 per unit. Workers on the production lines are on average paid $11 per hour. A stereo system usually takes 4 hours to complete. In addition, the rent on the equipment used to assemble stereo systems amounts to $5,200 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,000. Factory janitorial costs are $1,000 monthly. Advertising costs for the stereo system will be $5,000 per month. The factory building depreciation expense is $8,400 per year. Property taxes on the factory building will be $12,000 per year.
Transcribed Image Text:Instructions
(a) Prepare an answer sheet with the following column headings.
Cost Items Direct Material Direct Labor Manufacturing Period Costs
Overhead
Assuming that Ibri Company manufactures, on average, 1,000
stereo 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.
(b) Compute the cost to produce one stereo system.
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