Problem 19-1A Ohno Company specializes in manufacturing a unique model of bicycl
ID: 2532587 • Letter: P
Question
Problem 19-1A Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno’s monthly manufacturing cost and other expense data are as follows. Rent on factory equipment $11,100 Insurance on factory building 1,600 Raw materials (plastics, polystyrene, etc.) 75,100 Utility costs for factory 910 Supplies for general office 310 Wages for assembly line workers 58,100 Depreciation on office equipment 810 Miscellaneous materials (glue, thread, etc.) 1,200 Factory manager’s salary 5,800 Property taxes on factory building 410 Advertising for helmets 14,100 Sales commissions 10,100 Depreciation on factory building 1,600 Prepare an answer sheet with the following column headings. Enter each cost item on your answer sheet, placing the dollar amount under the appropriate headings. Total the dollar amounts in each of the columns. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Rent on factory equipment $ $ $ $ Insurance on factory building Raw materials Utility costs for factory Supplies for general office Wages for assembly line workers Depreciation on office equipment Miscellaneous materials Factory manager’s salary Property taxes on factory building Advertising for helmets Sales commissions Depreciation on factory building $ $ $ $ Link to Text Compute the cost to produce one helmet. (Round answer to 2 decimal places, e.g. 15.25.) Production cost per helmet $
Explanation / Answer
Cost to produce one helmet:
Total Production Cost = Direct Materials + Direct Labor + Manufacturing Overhead = $ ( 75,100 + 58,100 + 22,620) = $ 155,820
Production cost per helmet = $ 155,820 / 10,000 = $ 15.58.
Direct Materials Direct Labor Manufacturing Overhead Period Costs Rent on Factory Equipment $ 11,100 Insurance on Factory Building 1,600 Raw Materials 75,100 Utility Costs 910 Supplies: General Office 310 Wages: Assembly Line Workers 58,100 Depreciation : Office Equipment 810 Miscellaneous Materials 1,200 Factory Manager's Salary 5,800 Property Taxes for Factory Building 410 Advertising for Helmets 14,100 Sales Commission 10,100 Depreciation on Factory Building 1,600 Totals 75,100 58,100 22,620 25,320