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Giant Bike Sdn Bhd (GBSB) produces many different models of bicycles. Assume that the market has responded enthusiastically to a new model, the Jaguar. As

Giant Bike Sdn Bhd (GBSB) produces many different models of bicycles. Assume that the market has responded enthusiastically to a new model, the Jaguar. As a result, the company has established a separate manufacturing facility to produce these bicycles. The company produces 1,000 bicycles per month. Giant’s monthly manufacturing costs and other data are as follows:

1.

Rent on manufacturing equipment

RM2,000 per month

2.

Insurance on manufacturing building

RM750 per month

3.

Raw materials (frame, tires, etc)

RM80 per bicycle

4.

Utility costs for manufacturing facility

RM1,000 per month

5.

Supplies for administrative office

RM800 per month

6.

Wages for assembly line workers in a manufacturing facility

RM30 per bicycle

7.

Depreciation on office equipment

RM650 per month

8.

Miscellaneous manufacturing materials (lubricants, solders, etc)

RM1.20 per bicycle

9.

Property taxes on manufacturing building

RM2,400 per year

10.

Manufacturing supervisor’s salary

RM3,000 per month

11.

Advertising for bicycles

RM30,000 per year

12.

Sales commissions

RM10 per bicycle

13.

Depreciation on manufacturing building

RM1,500 per month

Required:

a) Classify the manufacturing costs above (items 1 to 13) as Production cost (direct materials / direct labor / other manufacturing overhead) or Period cost.

b) Complete total manufacturing costs for the month.

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