Elliott Company, a manufacturer of tennis rackets
P1-2BÂ Elliott Company, a manufacturer of tennis rackets, started production in November 2013. For the preceding 5 years, Elliott had been a retailer of sports equipment. After a thorough survey of tennis racket markets, Elliott decided to turn its retail store into a tennis racket factory.
Raw materials cost for a tennis racket will total $23 per racket. Workers on the pro- duction lines are paid on average $15 per hour. A racket usually takes 2 hours to complete. In addition, the rent on the equipment used to produce rackets amounts to $1,300 per month. Indirect materials cost $3 per racket. A supervisor was hired to oversee produc- tion; her monthly salary is $3,500.
Janitorial costs are $1,400 monthly. Advertising costs for the rackets will be $8,000 per month. The factory building depreciation expense is $8,400 per year. Property taxes on the factory building will be $9,600 per year.
Instructions
(a)Â Prepare an answer sheet with the following column headings.
                    Product Costs                     Â
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PCÂ $ Â 8,000
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Cost
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Â
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Direct
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Â
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Direct
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Â
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Manufacturing
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Â
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Period
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Â
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Item
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Â
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Materials
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Â
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Labor
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Â
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Overhead
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Â
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Costs
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Indicate the missing amount of different cost items, and prepare a condensed cost of goods manufactured schedule, an income statement, and
a partial balance sheet.
(LO 5, 6, 7), AN Assuming that Elliott manufactures, on average, 2,500 tennis rackets 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)Â Â Compute the cost to produce one racket.
Â
Answers
Status NEW
Posted 05 May 2017 01:05 PM
My Price 10.00
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Attachments
file 1493990719-Answer.docx preview (318 words )
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