Kabana company a manufacturer of stereo systems started its

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Reference no: EM13605896

Kabana Company, a manufacturer of stereo systems, started its production in October 2012. For the preceding 3 years Kabana had been a retailer of stereo systems. After a thorough survey of stereo system markets, Kabana decided to turn its retail store into a stereo equipment factory. Raw materials cost for a stereo system will total $74 per unit. Workers on the production lines are on average paid $12 per hour. A stereo system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble stereo systems amounts to 4,900 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,000. Factory janitorial cost are $1,3000 monthly. Advertising costs for the stereo system will be $8,5000 per month. The factory building depreciation expense is $7,2000 per year. Property taxes on the factory building will be 9,000 per year.

Instructions: Compute the cost to produce one stereo system.

Reference no: EM13605896

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