Compute the cost to produce one helmet

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Reference no: EM131198433

Question:

Khan 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). Khan's monthly manufacturing cost and other expense data are as follows.

Rent on factory equipment	$ 7,000
Insurance on factory building	1,500
Raw materials (plastics, polystyrene, etc.)	75,000
Utility costs for factory	900
Supplies for general office	300
Wages for assembly line workers	43,000
Depreciation on office equipment	800
Miscellaneous materials (glue, thread, etc.)	1,100
Factory manager's salary	5,700
Property taxes on factory building	400
Advertising for helmets	14,000
Sales commissions	7,000
Depreciation on factory building	1,500

(a) DM (Direct Materials) $75,000
DL (Direct Labor) $43,000
MO (Manufacturing Overhead) $18,100

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.

Cost Item		Direct Materials		Direct Labor		Manufacturing Overhead		Period Costs

(a) Compute the cost to produce one helmet.

Reference no: EM131198433

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