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.