Reference no: EM132652067

Par Play Company, a manufacturer of driver golf clubs, started production in November 2020. For the preceding five years, Par Play had been a retailer of sports equipment. After a thorough survey of driver golf club markets, Par Play decided to turn its retail store into a driver golf club factory.

Raw materials costs will total $24 per driver. Workers on the production lines are paid on average $14 per hour. A driver usually takes 2 hours to complete. In addition, the rent on the equipment used to produce drivers amounts to $1,500 per month. Indirect materials cost $5 per driver. A supervisor was hired to oversee production; her monthly salary is $4,150.

Factory janitorial costs are $1,880 monthly. Advertising costs for the drivers will be $6,120 per month. The factory building depreciation expense is $9,900 per year. Property taxes on the factory building will be $7,140 per year.

Problem 1: Complete the following answer column assuming that Par Play manufactures, on average, 2,500 drivers per month, and enter each cost item on your answer column , placing the dollar amount per month under the appropriate heading. Total the dollar amounts in each of the columns.

                                                       Product Costs Period Costs
Cost Item Direct Materials Direct Labour Manufacturing Overhead
Raw materials
Wages for workers
Rent on equipment
Indirect materials
Factory supervisor's salary
Factory janitorial costs
Advertising
Depreciation-factory building
Property taxes-factory building

Problem 2: Calculate the cost to produce one driver. (Round answer to 2 decimal places, e.g. 15.25.)