Question

Problem 10-2 (Part Level Submission) Bramble Company, a manufacturer of audio systems, started its production in October 2017. For the preceding 3 years, Bramble had been a retailer of audio systems. After a thorough survey of audio system markets, Bramble decided to turn its retail store into an audio equipment factory. Raw materials cost for an audio system will total $77 per unit. Workers on the production lines are on average paid $15 per hour. An audio system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,000 per month. Indirect materials cost $7 per system. A supervisor was hired to oversee production; her monthly salary is $3,870. Factory janitorial costs are $1,460 monthly. Advertising costs for the audio system will be $9,230 per month. The factory building depreciation expense is $6,840 per year. Property taxes on the factory building will be $8,400 per year.

(a) Assuming that Bramble manufactures, on average, 1,600 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. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Raw 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 $ $ $ $ Click if you would like to Show Work for this question:

Answer 1

(a) Assuming that Bramble manufactures, on average, 1,600 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. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Raw materials 1,600 x 77 = 123,200 $ $ $ Wages for workers 1,600 x 15 x 5 = 120,000 Rent on equipment 5,000 Indirect materials 1,600 x 7 = 11,200 Factory supervisor’s salary 3,870 Janitorial costs 1,460 Advertising 9,230 Depreciation on factory building 6,840/12 = 570 Property taxes on factory building 8,400/12 = 700 $123,200 $120,000 $22,800 $9,230

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