Methods of Estimating Costs: Account Analysis The accounting records for a company report the following manufacturing costs for the past year:

Production was 210,000 units. Fixed manufacturing overhead was $1,440,000.
For the coming year, costs are expected to increase as follows: direct materials costs by 20 per- cent, excluding any effect of volume changes; direct labor by 4 percent; and fixed manufacturing overhead by 7.5 percent. Variable manufacturing overhead per unit is expected to remain the same.
Required

a. Prepare a cost estimate for a volume level of 220,000 units of product this year.

b. Determine the costs per unit for last year and for this year.

Transcribed Image Text:

Direct materials Direct labor $1,260,000 1,050,000 Manufacturing overhead.... 2,364,000