Question

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		$11,800
Insurance on factory building		2,100
Raw materials (plastics, polystyrene, etc.)		84,100
Utility costs for factory		1,000
Supplies for general office		400
Wages for assembly line workers		59,300
Depreciation on office equipment		900
Miscellaneous materials (glue, thread, etc.)		1,300
Factory manager’s salary		6,300
Property taxes on factory building		400
Advertising for helmets		14,600
Sales commissions		10,700
Depreciation on factory building		1,700

(a)

Correct answer iconYour answer is correct.

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.

		Product Costs
Cost Item		Direct Materials		Direct Labor		Manufacturing Overhead		Period Costs
Rent on factory equipment		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Insurance on factory building		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Raw materials		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Utility costs for factory		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Supplies for general office		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Wages for assembly line workers		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Depreciation on office equipment		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Miscellaneous materials		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Factory manager’s salary		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Property taxes on factory building		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Advertising for helmets		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Sales commissions		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Depreciation on factory building		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
		$enter a total amount for this column		$enter a total amount for this column		$enter a total amount for this column		$enter a total amount for this column

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Attempts: 1 of 5 used

(b)

Compute the cost to produce one helmet. (Round answer to 2 decimal places, e.g. 15.25.)

Production cost per helmet

$enter production cost per helmet in dollars rounded to 2 decimal places

Answer 1

(a)

Correct answer iconYour answer is correct.

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.

		Product Costs
Cost Item		Direct Materials		Direct Labor		Manufacturing Overhead		Period Costs
Rent on factory equipment						11800
Insurance on factory building						2100
Raw materials		84100
Utility costs for factory						1000
Supplies for general office								400
Wages for assembly line workers				59300
Depreciation on office equipment								900
Miscellaneous materials						1300
Factory manager’s salary						6300
Property taxes on factory building						400
Advertising for helmets								14600
Sales commissions								10700
Depreciation on factory building						1700
		84100		59300		24600		26600

(b)

Compute the cost to produce one helmet. (Round answer to 2 decimal places, e.g. 15.25.)

Production cost per helmet

(84100+59300+24600)/10000 = 168000/10000 = 16.80