Question

Classify manufacturing costs into diferent categories and compute the nic.com P19.1A (LO 2) 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 $11,000 Insurance on factory building 1,500 Raw materials (plastics, polystyrene, etc.) 75,000 Utility costs for factory 900 Supplies for general office Wages for assembly line workers Depreciation on office equipment Miscellaneous materials (glue, thread, etc.) 1.100 Factory manager's salary Property taxes on factory building Advertising for helmets Sales commissions Depreciation on factory building 300 58,000 800 5,700 0,000 19-36 CHAPTER 19 Managerial Accounting a. DM $75,000 DL $58,000 MO $22,100 PC $25,100 Instructions a. Prepare an answer sheet with the following column headin Product Costs Direct Direct Manufacturing Materials Labor Overhead Period Costs Enter each cost item on your answer sheet, placing the dollar amount under the appropriate head ings. Total the dollar amounts in each of the columns b. Compute the cost to produce one helmet.

Answer 1

Product Costs Cost Items Period Costs Direct Material Direct Labor Manufacturing Overheads $ $ 11,000.00 1,500.00 $ 75,000.00 900.00 300.00 $ 58,000.00 Rent on Factory Equipment Insurance on factory building Raw Materials Utility cost for factory Supplies for general office Wages for assembly line workers Depreciation on Office Equipment Miscellaneous Material Factory's Manager Salary Property Taxes on Factory Building Advertising for helmets Sales Commission Depreciation on factory building 800.00 $ 1,100.00 5,700.00 400.00 $ $ 14,000.00 10,000.00 $ 1,500.00 Total 75,000.00 $ 58,000.00 $ 22,100.00 $ 25,100.00

Monthly cost for manufacturing 10,000 helmets = Product cost (i.e. Direct Material + Direct Labor + Manufacturing Overheads)

Manufacturing cost of 10,000 helmets = $75,000 + $58,000 + $22,100

Manufacturing cost of 10,000 helmets = $155,100

Manufacturing cost of 1 helmet = $155,100 / 10,000 helmets

Manufacturing cost of 1 helmet = $15.51