Bjerg Company specializes in manufacturing an exclusive model of bicycle helmet. The model is well accepted by the consumers and the company has sufficient orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Bjerg's monthly manufacturing cost and other expenditure data are as shown.
Rent on factory equipment $ 7,000
Insurance on factory building 1,500
Raw materials (plastics, polystyrene and so on) 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 and so on) 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
Requirements:
a) Make an answer sheet. Enter each cost item on your answer sheet, placing the dollar amount under the suitable headings. Total the dollar amounts in each of the columns. (If answer is zero, please enter 0; don't leave any fields blank.)
b) Calculate the cost to produce one helmet.