(a) Prepare an answer sheet with the following column headings. Enter each cost

Question

(a)

Prepare an answer sheet with the following column headings.

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

Lott 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). Lott’s monthly manufacturing cost and other expense data are as follows.
Rent on factory equipment $ 9,750 Insurance on factory building 1,840 Raw materials (plastics, polystyrene, etc.) 81,700 Utility costs for factory 970 Supplies for general office 370 Wages for assembly line workers 61,590 Depreciation on office equipment 830 Miscellaneous materials (glue, thread, etc.) 1,310 Factory manager’s salary 5,970 Property taxes on factory building 450 Advertising for helmets 14,260 Sales commissions 4,440 Depreciation on factory building 1,630

Explanation / Answer

Prime Cost Amount $ Amount $ Raw materials (plastics, polystyrene, etc.) 81,700 Wages for assembly line workers 61,590 Prime Cost 143,290 143,290 Add:Factory Overhead Rent on factory equipment $9,750 Insurance on factory building 1,840 Utility costs for factory 970 Factory manager’s salary 5,970 Property taxes on factory building 450 Depreciation on factory building 1630 Factory Cost $20,610 $20,610 Add:Office&Administration Expense Supplies for general office 370 Depreciation on office equipment 830 Miscellaneous materials (glue, thread, etc.) 1310 Total Cost of Production 2510 2510 Add Selling &Distribution Overhead Advertising for helmets 14,260 Sales commissions 4,440 Total Cost 18,700 18,700 Total Cost 185110

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