Q1 Bauss Company, a manufacturer of bicycles, started its production in December 2019. For the preceding 5 years Boss Co. had been a retailer of bicycles. After a thorough survey of bicycles markets, management of the Bauss Co. decided to turn its retail store into a bicycles manufacturing factory. Cost of steel frame for a bicycles will total to $80 per unit. The cost of tires for every bicycle would be $25. Workers on the production lines are on average paid $35 per hour. A bicycle usually takes 8 hours to complete. In addition, the rent on the equipment used to assemble bicycle amounts to $6,000 per month. Indirect materials cost $7 per bicycle. A supervisor was hired to oversee production; her monthly salary is $3,500. Factory cleaning costs are $1,500 monthly. Utility costs amounts to $250 per month. Advertising costs to sell bicycles will be 10,500 per year. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $9,900 per year. Depreciation of the office building is $6,000 per annum. Sales salary is $ 3500 per month. Assuming that Bauss manufactures, on average, 1450 bicycles per month Instructions: (a) Prepare an answer sheet with the following column headings. PRODUCT COST PERIOD COST COST ITEMS DIRECT MATERIALS DIRECT LABOR MANUFACTURING OVERHEADS (b) Compute the cost to produce one phone.
Q1
Bauss Company, a manufacturer of bicycles, started its production in December 2019. For the preceding 5 years Boss Co. had been a retailer of bicycles. After a thorough survey of bicycles markets, management of the Bauss Co. decided to turn its retail store into a bicycles manufacturing factory.
Cost of steel frame for a bicycles will total to $80 per unit. The cost of tires for every bicycle would be $25. Workers on the production lines are on average paid $35 per hour. A bicycle usually takes 8 hours to complete. In addition, the rent on the equipment used to assemble bicycle amounts to $6,000 per month. Indirect materials cost $7 per bicycle. A supervisor was hired to oversee production; her monthly salary is $3,500.
Factory cleaning costs are $1,500 monthly. Utility costs amounts to $250 per month. Advertising costs to sell bicycles will be 10,500 per year. The factory building
Assuming that Bauss manufactures, on average, 1450 bicycles per month
Instructions:
|
|
PRODUCT COST |
PERIOD COST |
||
|
COST ITEMS |
DIRECT MATERIALS |
DIRECT LABOR |
MANUFACTURING OVERHEADS |
|
|
|
|
|
|
|
Step by step
Solved in 2 steps
