Question
Question 2 Giant Bike Sdn Bhd (GBSB) produces many different models of bicycles. Assume that the market has responded enthusisistically to a new model, the
Question 2 Giant Bike Sdn Bhd (GBSB) produces many different models of bicycles. Assume that the market has responded enthusisistically 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. Giants 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 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 supervisors 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 (item 1 to 13) as Production cost (direct materials / direct labour / other manufacturing overhead) or Period cost. (6.5 marks) b) Complete total manufacturing costs for the month. (8.5 marks) (Total: 15 Marks)
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