Grossman Company specializes in manufacturing football helmets. The company has enough orders to keep the factory production at 20,000 football helmets per month. Grossman's monthly manufacturing cost and other expense data are as follows. Factory manager's salary $ 84,000 Advertising for helmets 70,000 Sales commissions 60,000 Depreciation on factory building 15,000 Rent on factory equipment 100,000 Insurance on factory building 5,000 Raw materials (plastic, polystyrene, etc.) 450,000 Utility costs for factory 14,000 Supplies for general office 1,500 Wages for assembly line workers 925,000 Depreciation on office equipment 8,000 Miscellaneous materials (glue, thread, etc.) 40,000 Maintenance costs on factory building 6,300
Instructions
(a) Prepare an answer sheet with the following column headings. Product Costs Cost Direct Direct Manufacturing Period Item Materials Labor Overhead Costs 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 football helmet.