Question

the activities that cause the incurrence of TB AND KERCISES Visit the book's companion website, at www.wiley.colon.ge/serves and choose the Student Companion site to access Exercises: Set B and Challenge Exercises. P14-1A 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 $11,000 Insurance on factory building 1,500 Raw materials (plastics, polystyrene, etc.) 75,000 Utility costs for factory 900 Supplies for general office 300 Wages for assembly line workers 58,000 Depreciation on office equipment 800 Miscellaneous materials (glue, thread, etc.) 1,100 Factory manager's salary 5,700 Property taxes on factory building 400 Advertising for helmets 14,000 Sales commissions 10,000 Depreciation on factory building 1,500

Answer 1

Answer-14-1A

		Product Costs
		Direct	Direct	Manufacturing	Period
Cost Item		Materials	Labor	Overhead	Costs
Rent on factory equipment				11000
Insurance on factory building				1500
Raw materials		75000
Utility costs for factory				900
Supplies for general office					300
Wages for assembly line workers			58000
Depreciation on office equipment					800
Miscellaneous materials				1100
Factory manager’s salary				5700
Property taxes on factory building				400
Advertising for helmets					14000
Sales commissions					10000
Depreciation on factory building				1500
Total		75000	58000	22100	25100
Total production cost = 75000+58000+22100 =		155100
b- Production cost per helmet = 155100/10000 =	15.51

14-2A-

	Product Costs			Period costs
Cost item	Direct Materials	Direct Labor	Manufacturing Overhead
Raw materials	111,000 (1500*74)
Wages for workers		90,000 (1500*12*5)
Rent on equipment			4,900
Indirect materials			7,500 (5*1500)
Supervisor's salary			3,000
Factory janitorial			1,300
Advertising				9,500
Depreciation on factory building			650 (7,800/12)
Property taxes			750 (9,000/12)
Total	111,000	90,000	18,100	9,500

b-Total Product cost= Direct Materials+Direct Labor+Manufacturing Overhead

=$111,000+$90,000+$18,100

=$219,100

The cost to produce one audio system= $219,100/ 1,500

=$146.07

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