Question

Question 2

Giant Bike Sdn Bhd (GBSB) produces many different models of bicycles. Assume that the market has responded enthusisistically to a new model, the Jaguar. As a result, the company has established a separate manufacturing facility to produce these bicycles. The company produces 1,000 bicycles per month. Giant’s monthly manufacturing costs and other data are as follows:

1.	Rent on manufacturing equipment	RM2,000 per month
2.	Insurance on manufacturing building	RM750 per month
3.	Raw materials (frame, tires etc)	RM80 per bicycle
4.	Utility costs for manufacturing facility	RM1,000 per month
5.	Supplies for administrative office	RM800 per month
6.	Wages for assembly line workers in manufacturing facility	RM30 per bicycle
7.	Depreciation on office equipment	RM650 per month
8.	Miscellaneous manufacturing materials (lubricants, solders etc)	RM1.20 per bicycle
9.	Property taxes on manufacturing building	RM2,400 per year
10.	Manufacturing supervisor’s salary	RM3,000 per month
11.	Advertising for bicycles	RM30,000 per year
12.	Sales commissions	RM10 per bicycle
13.	Depreciation on manufacturing building	RM1,500 per month

Required:

a) Classify the manufacturing costs above (item 1 to 13) as Production cost (direct materials / direct labour / other manufacturing overhead) or Period cost.

b) Complete total manufacturing costs for the month.

Answer 1