Records at Hal's Accounting Services show the following costs for year 1. Direct materials and supplies Employee conta Total overhead 40,000 2,900,000 1,300,000 Production was 25,000 billable hours. Fixed overhead was $700,000. Assuming no change in billeble hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 5 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected to increase by 5 percent. Required: a. Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? b. Determine the total costs per billable hour for year 1 and year 2. Complete this question by entering your answers in the tabs below. Required A Required B Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? Cost Item Year 2 Cost Direct materials and supplies Direct labor Variable overhead Fixed overhead Total costs

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A. Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2?

B. Determine the total costs per billable hour for year 1 and 2. 

Records at Hal's Accounting Services show the following costs for year 1.
Direct materials and supplies
Employee costa
Total overhead
40,000
2,900,000
1,300,000
Production was 25,000 billable hours. Fixed overhead was $700,000.
Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct
labor costs are expected to increase by 5 percent. Variable overhead per billable hour is expected to remain the same, but fixed
overhead is expected to increase by 5 percent.
Required:
a. Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead,
and fixed overhead costs for year 2?
b. Determine the total costs per billable hour for year 1 and year 2.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable
overhead, and fixed overhead costs for year 2?
Cost Item
Year 2 Cost
Direct materials and supplies
Direct labor
Variable overhead
Fixed overhead
Total costs
Transcribed Image Text:Records at Hal's Accounting Services show the following costs for year 1. Direct materials and supplies Employee costa Total overhead 40,000 2,900,000 1,300,000 Production was 25,000 billable hours. Fixed overhead was $700,000. Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 5 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected to increase by 5 percent. Required: a. Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? b. Determine the total costs per billable hour for year 1 and year 2. Complete this question by entering your answers in the tabs below. Required A Required B Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? Cost Item Year 2 Cost Direct materials and supplies Direct labor Variable overhead Fixed overhead Total costs
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