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Gorham, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2017. (Click the

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Gorham, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2017. (Click the icon to see the account information.) Gorham, Inc., produced 80,000 units of product in 2017. Gorham's management is estimating costs for 2018 on the basis of 2017 numbers. The following additional information is available for 2018. (Click the icon to see the additional information.) Read the requirements. CH) Requirement 1. Prepare a schedule of variable, fixed, and total manufacturing costs for each account category in 2018. Estimate total manufacturing costs for 2018. To assist you begin by selecting the formula to calculate the variable cost for each account in 2018. - X Variable unit Requirements 10 1 x = cost in 2018 1. Prepare a schedule of variable, fixed, and total manufacturing costs for each - X account category in 2018. Estimate total manufacturing costs for 2018. Data table 2. Calculate Gorham's total manufacturing cost per unit in 2017 and estimate total manufacturing cost per unit in 2018. 3. How can you obtain better estimates of fixed and variable costs? Why would Account Classification these better estimates be useful to Gortari? Amount Direct materials All variables 320,000 - X Direct manufacturing labor All variable 240,000 More info Power All variable 40,000 Supervision labor 20% variable 68.000 a. Direct materials prices in 2018 are expected to increase by 8% compared with 2017. Materials-handling labor 40% variable 60,000 b. Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 12% in 2018 compared with 2017 Maintenance labor 45% variable 80,000 c. Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change Depreciation 0% variable 105,000 from 2017 to 2018 Rent, property taxes, and administration 0% variable 115,000 d. Depreciation costs are expected to increase by 6%, and rent, property taxes, and administration costs are expected to increase by 10%. e. Gorfam expects to manufacture and sell 85,000 units in 2018

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