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		$11,800
Insurance on factory building		2,100
Raw materials (plastics, polystyrene, etc.)		84,100
Utility costs for factory		1,000
Supplies for general office		400
Wages for assembly line workers		59,300
Depreciation on office equipment		900
Miscellaneous materials (glue, thread, etc.)		1,300
Factory manager’s salary		6,300
Property taxes on factory building		400
Advertising for helmets		14,600
Sales commissions		10,700
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.

Answer 1

	Production costs			Period costs
	Direct materials	Direct labor	Manufacturing overhead
Rent on factory equipment			11,800
Insurance on factory building			2,100
Raw materials	84,100
Utility costs for factory			1000
Supplies for general office				400
Wages for assembly line workers		59,300
Depreciation on office equipment				900
Miscellaneous materials			1,300
Factory manager's salary			6,300
Property taxes on factory building			400
Advertising for helmets				14,600
Sales commissions				10,700
Depreciation on factory building			1,700
Total	$84,100	$59,300	$24,600	$26,600

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