Giant Bike Co. Ltd.produces many different models of bicycles. Assume that the market has responded enthusiastically to a new model, the Jaguar. As a result, the company has established a separate manufacturing facility to produce these bicycles. The company produces 1,000 bicycles per month. Giant”s monthly manufacturing costs and other data are as follows.
|
1. Rent on manufacturing equipment (lease cost) |
$2,000/month |
|
2. Insurance on manufacturing building |
$750/month |
|
3. Raw materials (frames, tires, etc.) |
$80/bicycle |
|
4. Utility costs for manufacturing facility |
$1,000/month |
|
5. Supplies for administrative office |
$800/month |
|
6. Wages for assembly line workers in manufacturing facility |
$30/bicycle |
|
7. Depreciation on office equipment |
$650/month |
|
8. Miscellaneous manufacturing materials (lubricants, solders, etc.) |
$1.20/bicycle |
|
9. Property taxes on manufacturing building |
$2,400/year |
|
10. Manufacturing supervisor”s salary |
$3,000/month |
|
11. Advertising for bicycles |
$30,000/year |
|
12. Sales commissions |
$10/bicycle |
|
13. Depreciation on manufacturing building |
$1,500/month |
Instructions
Compute total manufacturing costs for the month.