The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials Direct labor variable overhead $ 350,000 261,000 235,000 Production was 150,000 units. Fixed manufacturing overhead was $805,000. 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 120,000 units of product this year. b. Determine the costs per unit for last year and for this year.
The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials Direct labor variable overhead $ 350,000 261,000 235,000 Production was 150,000 units. Fixed manufacturing overhead was $805,000. 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 120,000 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:The accounting records for Portland Products report the following manufacturing costs for the past year.
Direct materials
Direct labor
variable overhead
Production was 150,000 units. Fixed manufacturing overhead was $805,000.
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 120,000 units of product this year.
b. Determine the costs per unit for last year and for this year.
$ 350,000
261,000
235,000
Complete this question by entering your answers in the tabs below.
Required A
Prepare a cost estimate for a volume level of 120,000 units of product this year. (Do not round intermediate calculations.)
Cost Item
This Year's Cost
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total costs
Required B
$
0
< Required A
Required B >
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