Boss Company, a manufacturer of headphones, started its production in month of May 2020. Raw materials cost for a headphone will total $40 per unit. Workers on the production lines are on average paid $12 per hour. A headphone usually takes 4 hours to complete. In addition, the rent on the equipment used to assemble phones amounts to $7,200 per month. Indirect materials cost $4 per headphone. A supervisor was hired to oversee production; her monthly salary is $2,500. Factory Cleaning costs are $1,000 monthly. Advertising costs to sell headphones will be 9,500 per month. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $10,800 per year. Depreciation of the office building is $6,000 per annum. Boss manufactures, on average, 1400 headphones per month, Instructions: (a) Prepare an answer sheet with the following column headings for Product and Period cost. (b) Compute the cost to produce one headphone. Cost items Direct Material Product cost Period Cost Direct Labor Manufacturing Overheads

Boss Company, a manufacturer of headphones, started its production in month of May 2020. Raw materials cost for a headphone will total $40 per unit. Workers on the production lines are on average paid $12 per hour. A headphone usually takes 4 hours to complete. In addition, the rent on the equipment used to assemble phones amounts to $7,200 per month. Indirect materials cost $4 per headphone. A supervisor was hired to oversee production; her monthly salary is $2,500. Factory Cleaning costs are $1,000 monthly. Advertising costs to sell headphones will be 9,500 per month. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $10,800 per year. Depreciation of the office building is $6,000 per annum. Boss manufactures, on average, 1400 headphones per month, Instructions: (a) Prepare an answer sheet with the following column headings for Product and Period cost. (b) Compute the cost to produce one headphone. Cost items Direct Material Product cost Period Cost Direct Labor Manufacturing Overheads

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Description: Question 2:Boss Company, a manufacturer of headphones, startedits production in month of May 2020.Raw materials cost for a headphone will total $40 perunit. Workers on the production lines are on averagepaid $12 per hour. A headphone usually takes 4

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 40P: Olin Company manufactures and distributes carpentry tools. Production of the tools is in the mature...

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Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of cost of services sold in good form. 2. How does this cost of services sold statement differ from the cost of goods sold statement for a manufacturing firm?
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6. Boss Company, a manufacturer of headphones, started its production in month of May 2020. Raw materials cost for a headphone will total $40 per unit. Workers on the production lines are on average paid $12 per hour. A headphone usually takes 4 hours to complete. In addition, the rent on the equipment used to assemble phones amounts to $7,200 per month. Indirect materials cost $4 per headphone. A supervisor was hired to oversee production; her monthly salary is $2,500. Factory Cleaning costs are $1,000 monthly. Advertising costs to sell headphones will be 9,500 per month. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $10,800 per year. Depreciation of the office building is $6,000 per annum. Boss manufactures, on average, 1400 headphones per month, Instructions: (a) Prepare an answer sheet with the following column headings for Product and Period cost. (b) Compute the cost to produce one headphone. Cost items Product cost…
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