Problem 10-1

Culver 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 at10,000helmets per month (80% of its full capacity). Culver's monthly manufacturing cost and other expense data are as follows.

Rent on factory equipment $12,000

Insurance on factory building 2,460

Raw materials used (plastics, polystyrene, etc.) 80,000

Utility costs for factory 970

Supplies for general office 360

Wages for assembly line workers 59,000

Depreciation on office equipment 910

Miscellaneous materials (glue, thread, etc.) 1,400

Factory manager's salary 6,700

Property taxes on factory building 470

Advertising for helmets 14,500

Sales commissions 10,790

Depreciation on factory building 1,600