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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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 >
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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