Question
Exercise 5-30 Methods of Estimating Costs: Account Analysis (LO 5-3) The accounting records for Portland Products report the following manufacturing costs for the past year:
Exercise 5-30 Methods of Estimating Costs: Account Analysis (LO 5-3)
The accounting records for Portland Products report the following manufacturing costs for the past year:
Direct materials | $ | 310,000 | |
Direct labor | 263,000 | ||
Variable overhead | 232,000 | ||
Production was 130,000 units. Fixed manufacturing overhead was $728,000.
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.
a. Prepare a cost estimate for a volume level of 104,000 units of product this year. (Do not round intermediate computations.)
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b. Determine the costs per unit for last year and for this year. (Round your answers to 2 decimal places.)
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