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

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 helmet.

Transcribed Image Text:

Rent on factory equipment Insurance on factory building Raw materials (plastics, polystyrene, etc.) Utility costs for factory $ 9,000 1,500 75,000 Supplies for general office Wages for assembly line workers Depreciation on office equipment Miscellaneous materials (glue, thread, etc.) Factory manager's salary Property taxes on factory building Advertising for helmets Sales commissions Depreciation on factory building 900 300 53,000 800 1,100 5,700 400 14,000 10,000 1,500