Gazca orders to keep the f manufacturing cost and other expe

Gazca orders to keep the f manufacturing cost and other expense data are as follows. Company specializes in manufacturing motorcycle helmets. The company has enough actory production at 1,000 motorcycle helmets per month. Gazca\'s monthly Maintenanac costs factory building 1,500 Factory manager\'s salary Advertising for helmets Sales commissions Depreciation on factory building Rent on factory equipment Insurance on factory building Raw materials (plastic, polystyrene, etc.) Utility costs for factory Supplies for general office Wages for assembly line workers Depreciation on office equipment Miscellaneous materials (glue, thread, etc.) 4,000 8,000 5,000 700 6,000 3,000 20,000 800 200 54,000 500 2,000 Instructions (a) Prepare an answer sheet with the following column headings. Product Costs Direct Materials Manufacturing Overhead Cost Direct Labor Period Costs Item 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.

Solution

Cost Item Direct Material Direct Labour Manufacturing Overhead period Cost Maintenance Cost onFactory Building      1,500.00 Factory Managers Salary      4,000.00 Advertising for helmet      8,000.00 Sales Commission      5,000.00 Depreciation on Factory Building          700.00 Rent on FactoryEquipment      6,000.00 Insurance on Factory Building      3,000.00 RawMaterial    20,000.00 Utility Cost for Factory          800.00 Suppliesfor General Office          200.00 Wages for assemblyline workers    54,000.00 Depreciation on Office Equipments          500.00 Miscellaneous Material      2,000.00    20,000.00    54,000.00    18,000.00    13,700.00 B Total Production Cost Direct Material    20,000.00 Direct Labour    54,000.00 Manufacturing Oveehraed    18,000.00 Total Production Cost    92,000.00 Production Cost per Helmet = $92000/10000 =$9.2