Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-3) The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials Direct labor Variable overhead $350,000 264,000 231,000 Production was 170,000 units. Fixed manufacturing overhead was $795,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes; direct labor by 4 percent; and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same. Required: a. Prepare a cost estimate for a volume level of 136,000 units of product this year. b. Determine the costs per unit for last year and for this year.
Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-3) The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials Direct labor Variable overhead $350,000 264,000 231,000 Production was 170,000 units. Fixed manufacturing overhead was $795,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes; direct labor by 4 percent; and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same. Required: a. Prepare a cost estimate for a volume level of 136,000 units of product this year. b. Determine the costs per unit for last year and for this year.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-3)
The accounting records for Portland Products report the following manufacturing costs for the past year.
Direct materials
Direct labor
Variable overhead
$350,000
264,000
231,000
Production was 170,000 units. Fixed manufacturing overhead was $795,000.
For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume
changes; direct labor by 4 percent; and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is
expected to remain the same.
Required:
a. Prepare a cost estimate for a volume level of 136,000 units of product this year.
b. Determine the costs per unit for last year and for this year.
> Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required A Required B
Prepare a cost estimate for a volume level of 136,000 units of product this year. (Do not round intermediate calculations.)
Cost Item
This Year's
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total costs
Cost
$
55,856 X
8,432 X
184,960 X
$
874,500
1,123,748
< Required A
Required B >
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