Problem 1-1A (Video) 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 $11,300 Insurance on factory building 1,700 Raw materials (plastics, polystyrene, etc.) 84,800 Utility costs for factory 1,000 Supplies for general office 300 Wages for assembly line workers 65,700 Depreciation on office equipment 800 Miscellaneous materials (glue, thread, etc.) 1,300 Factory manager’s salary 6,500 Property taxes on factory building 500 Advertising for helmets 15,100 Sales commissions 11,000 Depreciation on factory building 1,600 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.Compute the cost to produce one helmet.

Answer :

TomShelby

Answer:

cost per helmet: $17.52

Explanation:

The manufacturing cost only should be considered that is overhead,labor and materials.

Overhead

Rent on factory equipment                           11,300

Depreciation on factory building                   1,600

Property taxes on factory building                  500

Miscellaneous materials (glue, thread, etc.) 1,300

Factory manager’s salary                              6,500

Insurance on factory building                        1,700

Utility costs for factory                                  1,000

Depreciation on office equipment                  800  

Total Overhead:                                           24,700

Raw materials (plastics, polystyrene, etc.) 84,800

Wages for assembly line workers               65,700

Total Manufacturing Cost                           175,200

helmet produced: 10,000

cost per Helment: 175,200 / 10,000 = $17.52

Other Questions