Question

In: Accounting

Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted...

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 $11,400
Insurance on factory building 2,400
Raw materials (plastics, polystyrene, etc.) 78,000
Utility costs for factory 900
Supplies for general office 400
Wages for assembly line workers 63,400
Depreciation on office equipment 800
Miscellaneous materials (glue, thread, etc.) 1,400
Factory manager’s salary 6,600
Property taxes on factory building 500
Advertising for helmets 14,400
Sales commissions 11,000
Depreciation on factory building 1,700

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

eTextbook and Media

  

  

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

Solutions

Expert Solution

Solution ;

                                Product costs

Cost item Direct material Direct labour Manufacturing O.H
Rent on factory equipment $11400
Insurance on factory building $2400
Raw materials 78000
Utility Costs for factory 900
Supplies for general office 400
Wages for assembly line workers 63400
Depreciation on office equipment 800
Miscellaneous material 1400
Factory manager's salary 6600
Property tax on factory building 500
Advertising for helmets 14400
Sales commissions 11000
Depreciation on factory building 17000
Total 79400 63400 65400

Total cost = Direct material + Direct labour + Manufacturing O.H

                = 79400 + 63400 + 65400

                = 208200

As $208200is the cost to produce 10,000 helmets.

Production cost per helmet = 208200 / 10,000

                                        = $ 20.82


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