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.