a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2014

Account	Classification	Amount
Direct materials	All variable	$271,250
Direct manufacturing labor	All variable	193,750
Power	All variable	19,375
Supervision labor	25% variable	31,000
Materials-handling labor	60% variable	62,000
Maintenance labor	50% variable	69,750
Depreciation	0% variable	110,000
Rent, property taxes, and administration	0% variable	105,000

.produced

77,500

units of product in

2014.

HamweyHamwey's

management is estimating costs for

2015

on the basis of

2014

numbers. The following additional information is available for

2015

Prepare a schedule of variable, fixed, and total manufacturing costs for each account category in

2015.

Estimate total manufacturing costs for

2015.

2.

Calculate

HamweyHamwey's

total manufacturing cost per unit in

20142014,

and estimate total manufacturing cost per unit in

2015.

3.

How can you obtain better estimates of fixed and variable costs? Why would these better estimates be useful to

HamweyHamwey?

a.	Direct materials prices in 2015

are expected to increase by

4

%

compared with

2014

.
b.	Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 8

%

in

2015

compared with

2014

.
c.	Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change from 2014

to

2015

.
d.	Depreciation costs are expected to increase by 10

%,

and rent, property taxes, and administration costs are expected to increase by

12

%.
e.	Hamwey

expects to manufacture and sell

87 comma 500

units in

2015

.