Problem 10-1

Swifty 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). Swiftys monthly manufacturing cost and other expense data are as follows.

Rent on factory equipment		$11,000
Insurance on factory building		1,650
Raw materials used (plastics, polystyrene, etc.)		77,100
Utility costs for factory		930
Supplies for general office		380
Wages for assembly line workers		59,700
Depreciation on office equipment		870
Miscellaneous materials (glue, thread, etc.)		1,460
Factory managers salary		6,400
Property taxes on factory building		460
Advertising for helmets		14,500
Sales commissions		10,850
Depreciation on factory building		1,700

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.

		Product Costs
Cost Item		Direct Materials		Direct Labor		Manufacturing Overhead		Period Costs
Rent on factory equipment		$		$		$		$
Insurance on factory building
Raw materials
Utility costs for factory
Supplies for general office
Wages for assembly line workers
Depreciation on office equipment
Miscellaneous materials
Factory managers salary
Property taxes on factory building
Advertising for helmets
Sales commissions
Depreciation on factory building
		$		$		$		$

Compute the cost to produce one helmet. (Round answer to 2 decimal places, e.g. 15.25.)

Production cost per helmet

$

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