Agler Company specializes in manufacturing motorcycle helmets. The company has enough orders to keep the factory production at 1,000 motorcycle helmets per month. Agler”s monthly manufacturing cost and other expense data are shown below.
|
Maintenance costs on factory building |
$ 1,500 |
|
Factory manager”s salary |
5,500 |
|
Advertising for helmets |
8,000 |
|
Sales commissions |
4,000 |
|
Depreciation on factory building |
700 |
|
Rent on factory equipment |
6,000 |
|
Insurance on factory building |
3,000 |
|
Raw materials (plastic, polystyrene, etc.) |
25,000 |
|
Utility costs for factory |
800 |
|
Supplies for general office |
200 |
|
Wages for assembly line workers |
54,000 |
|
Depreciation on office equipment |
500 |
|
Miscellaneous materials (glue, thread, etc.) |
2,000 |
Instructions
(a)Prepare an answer sheet with the following column headings.
|
Product Cost |
||||
|
Cost Item |
Direct Materials |
Direct Labor |
Manufacturing Overhead |
Period Costs |
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.
(b)Compute the cost to produce one motorcycle helmet.