1) Records for Paul Cablesource to year 1 are below Direct Materials $95,000.00 Labor $1,800,000.00 Total Overhead $1,578,000.00 Production was 30000 units. Direct Materials will go up by 20 percent, Labor will go up 3 percent Variable Overhead will drop by 5 percent Fixed Overhead is 850000 and will increase 15 percent In Year 2 production will be 35000 units what is the estimated total cost for Material Labor, Variable Overhead and Fixed Overhead? What is the unit cost for each year?

2) Paul Cablesource makes cables. Discussions with management suggest that Overhead seems to vary with labor hours, machine hours or both. The following data was collected for last years operations Month Labor hr Machine hr Overhead Cost 1 2999 8020 $500,000.00 2 4500 8888 $567,919.00 3 3456 6500 $567,939.00 4 3422 6399 $567,959.00 5 3400 7777 $567,979.00 6 3244 7677 $567,999.00 7 3678 7899 $568,019.00 8 3456 6334 $501,000.00 9 3212 6789 $568,059.00 10 3344 7899 $568,079.00 11 3777 7566 $568,099.00 12 4506 7455 $568,119.00

a. Use the high low method to calculate the fixed and variable portions of overhead based on machine hours b. Use the high low method to calculate the fixed and variable portions of overhead based on labor hours c. If management estimates average Machine hours per month to be 7300 hours estimate the total fixed and variable overhead costs d. If management estimates average labor hours per month to be 3600 hours estimate the total fixed and variable overhead costs