Case 7: Armstrong Helmet Company

CASE 7
ARMSTRONG HELMET COMPANY
1.

Item
Administrative salaries
Advertising for helmets
Depreciation on factory building Depreciation on office equipment Insurance on factory building
Miscellaneous expenses— factory Office supplies expense
Professional fees
Property taxes on factory building Raw materials used
Rent on production equipment Research and development
Sales commissions
Utility costs—factory
Wages—factory
Totals

© 2008

For Instructor Use Only

Direct
Materials

Product Costs
Direct
Manufacturing
Labor
Overhead

Period
Costs
$15,500
11,000

$ 1,500
800
1,500
1,000
300
500
400
$70,000
6,000
10,000
40,000
900
$70,000
$70,000

$70,000

$11,300

$78,100

Case 7-1

CASE 7 (Continued)
2.
Item
Administrative salaries ............................
Advertising for helmets ...........................
Depreciation on factory building .........
Depreciation on office equipment .......
Insurance on factory building ...............
Miscellaneous expenses—factory ......
Office supplies expense ..........................
Professional fees........................................
Property taxes on factory building .....
Raw materials used ...................................
Rent on production equipment.............
Research and development ...................
Sales commissions....................................
Utility costs—factory ................................
Wages—factory...........................................
Totals...............................................................

© 2008

For Instructor Use Only

Variable
Costs

$

Fixed
Costs
$15,500
11,000
1,500
800
1,500

1,000
300
500
400
70,000
6,000
10,000
40,000
900

70,000
$181,000

$48,400

Total
Costs
$15,500
11,000
1,500
800
1,500
1,000
300
500
400
70,000
6,000
10,000
40,000
900
70,000
$229,400

Case 7-2

CASE 7 (Continued)
3.
ARMSTRONG HELMET COMPANY
Cost