Question
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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