Question

Schwann 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). Schwann’s monthly manufacturing cost and other expense data are as follows.

Rent on factory equipment		$11,500
Insurance on factory building		1,700
Raw materials (plastics, polystyrene, etc.)		77,100
Utility costs for factory		900
Supplies for general office		400
Wages for assembly line workers		59,700
Depreciation on office equipment		900
Miscellaneous materials (glue, thread, etc.)		1,500
Factory manager’s salary		6,400
Property taxes on factory building		500
Advertising for helmets		14,500
Sales commissions		10,900
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		$enter a total amount		$enter a total amount		$enter a total amount

Answer 1

Cost item				Direct	Direct	Manufacturing	Period
				Materials	Labor	overhead	costs
Rent on factory equipment						11,500
Insurance on factory building						1,700
Raw materials				77,100
Utility costs for factory						900
Supplies for general office							400
Wages for assembly line workers					59,700
Depreciation on office equipment							900
Miscellaneous materials						1,500
Factory manager's salary						6,400
Property taxes on factory building						500
Advertising for helmets							14,500
Sales commissions							10,900
Depreciation on factory building						1,700
				77100	59700	24,200	26700