Fabila Company specializes in manufacturing a unique model of - 13983

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Problem 19-1A

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Fabila 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). Fabila’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) Prepare an answer sheet.

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.

(b) Compute the cost to produce one helmet. (Round answer to 2 decimal places, e.g. 1.25.)

(b) Total production costs

 

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Problem 19-1A.docx
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