Question 1 Ohno 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). Ohno’s monthly manufacturing cost and other expense data are as follows.

Rent on factory equipment $11,100
Insurance on factory building 1,900
Raw materials (plastics, polystyrene, etc.) 78,300
Utility costs for factory 900
Supplies for general office 300
Wages for assembly line workers 67,100
Depreciation on office equipment 900
Miscellaneous materials (glue, thread, etc.) 1,400
Factory manager’s salary 5,800
Property taxes on factory building 400
Advertising for helmets 14,500
Sales commissions 10,800
Depreciation on factory building 1,700