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		$11,500
Insurance on factory building		1,780
Raw materials (plastics, polystyrene, etc.)		80,800
Utility costs for factory		920
Supplies for general office		320
Wages for assembly line workers		59,700
Depreciation on office equipment		830
Miscellaneous materials (glue, thread, etc.)		1,470
Factory manager’s salary		6,200
Property taxes on factory building		420
Advertising for helmets		14,900
Sales commissions		10,900
Depreciation on factory building		1,640

Prepare an answer sheet with the following column headings.

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		$		$		$		$
Insurance on factory building
Raw materials
Utility costs for factory
Supplies for general office
Wages for assembly line workers
Depreciation on office equipment
Miscellaneous materials
Factory manager’s salary
Property taxes on factory building
Advertising for helmets
Sales commissions
Depreciation on factory building
		$		$		$		$

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

Production cost per helmet

$

Answer 1