Petra Company specializes in manufacturing motorcycle helmets. The company has enough orders to keep the factory production at 1,000 motorcycle helmets per month. Petra’s monthly manufacturing cost and other expense data are as follows.

Maintenance costs on factory building ……………..$ 1,500

Factory manager’s salary ……………………………. 4,000

Advertising for helmets ……………………………… 8,000

Sales commissions …………………………………… 5,000

Depreciation on factory building ………………………. 700

Rent on factory equipment …………………………….6,000

Insurance on factory building ………………………….3,000

Raw materials (plastic, polystyrene, etc.) …………….20,000

Utility costs for factory …………………………………. 800

Supplies for general office ………………………………200

Wages for assembly line workers ……………………54,000

Depreciation on office equipment ………………………500

Miscellaneous materials (glue, thread, etc.) …………...2,000

Instructions

(a) Prepare an answer sheet with the following column headings.

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.

(b) Compute the cost to produce one motorcycle helmet.

Transcribed Image Text:

Product Costs Cost Direct Manufacturing Overhead Direct Materials Period Costs Item Labor