Question

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 $12,100 Insurance on factory building 2,540 Raw materials (plastics, polystyrene, etc.) 80,300 Utility costs for factory 950 Supplies for general office 310 Wages for assembly line workers 63,700 Depreciation on office equipment 840 Miscellaneous materials (glue, thread, etc.) 1,310 Factory manager’s salary 6,400 Property taxes on factory building 500 Advertising for helmets 14,400 Sales commissions 10,880 Depreciation on factory building 1,630.

Answer 1

	Product Costs
	Direct Materials	Direct Labor	Manufacturing Overhead	Period Costs
Rent on factory equipment			12100
Insurance on factory building			2540
Raw materials (plastics, polystyrene, etc.)	80300
Utility costs for factory			950
Supplies for general office				310
Wages for assembly line workers		63700
Depreciation on office equipment				840
Miscellaneous materials (glue, thread, etc.)			1310
Factory manager’s salary			6400
Property taxes on factory building			500
Advertising for helmets				14400
Sales commissions				10880
Depreciation on factory building			1630
Total	80300	63700	25430	26430
Production cost per helmet	16.94	=(80300+63700+25430)/10000