Copa Company, a manufacturer of stereo systems, started itsproduction in October

Question

Copa Company, a manufacturer of stereo systems, started itsproduction in October 2008. For the preceding 3 years Copa had beena retailer of stereo systems. After a thorough survey of stereosystem markets, Copa decided to turn its retail store into a stereoequipment factory.
      Raw materials cost for a stereosystem will total $74 per unit. Workers on the production lines areon average paid $12 per hour. A stereo system usually takes 5 hoursto complete. In addition, the rent on the equipment used toassemble stereo systems amounts to $4,900 per month. Indirectmaterials cost $5 per system. A supervisor was hired to overseeproduction; her monthly salary is $3,000.
      Janitorial costs are $1,300monthly. Advertising costs for the stereo system will be $8,500 permonth. The factory building depreciation expense is $7,200 peryear. Property taxes on the factory building will be $9,000 peryear.Assuming that Copa manufactures, on average, 1,300 stereosystems per month, Compute the cost to produce one stereosystem? Answer) Rent=4,900 supervisor=3,000 janitoral=1,300 advertising=8,500 depreciation = 7,200 property tax = 9,000 total = 33,900/1,300 units per month = 26.o8 per unit raw material =74.00 worker 12/hr @ 5 hrs per unit = 60.00 total cost per unit = 160.00 Copa Company, a manufacturer of stereo systems, started itsproduction in October 2008. For the preceding 3 years Copa had beena retailer of stereo systems. After a thorough survey of stereosystem markets, Copa decided to turn its retail store into a stereoequipment factory.
      Raw materials cost for a stereosystem will total $74 per unit. Workers on the production lines areon average paid $12 per hour. A stereo system usually takes 5 hoursto complete. In addition, the rent on the equipment used toassemble stereo systems amounts to $4,900 per month. Indirectmaterials cost $5 per system. A supervisor was hired to overseeproduction; her monthly salary is $3,000.
      Janitorial costs are $1,300monthly. Advertising costs for the stereo system will be $8,500 permonth. The factory building depreciation expense is $7,200 peryear. Property taxes on the factory building will be $9,000 peryear.Assuming that Copa manufactures, on average, 1,300 stereosystems per month, Compute the cost to produce one stereosystem? Answer) Rent=4,900 supervisor=3,000 janitoral=1,300 advertising=8,500 depreciation = 7,200 property tax = 9,000 total = 33,900/1,300 units per month = 26.o8 per unit raw material =74.00 worker 12/hr @ 5 hrs per unit = 60.00 total cost per unit = 160.00

Explanation / Answer

Cost Statement ===========                                                                   UnitCost                     TotalCost                                                                --------------               -------------- Production Per month 1300 Stereos RawMaterials                                               74.00                              96,200 Labor ( 12 X 5 perstereo)                           60.00                              78,000 IndirectMaterilas                                            5.00                              6,500 PrimeCost                                                 139.00                           180,700 FactoryRent                                                   3.77                            4,900 Supervisor'sSalary                                          2.31                             3,000 Janitoral                                                           1.00                            1,300 Depreciation on FactoryBldg.                          5.53                           7,200 Property Tax on FactoryBldg.                         6.92                           9,000 FactoryCost                                               158.53                       206,100 Advertising                                                       6.54                           8,500 TotalCost                                                  165.07                        214,600 I think you have missed indirect material i.e.

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