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I need help preparing a schedule variable, fixed and total manufacturing costs. Gower, Inc., a manufacturer of plastic products, reports the following manufacturing costs and
I need help preparing a schedule variable, fixed and total manufacturing costs.
Gower, 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.) Gower, Inc., produced 72,500 units of product in 2017. Gower'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. Data Table Account Classification Amount All variable $ 290,000 All variable 181,250 Direct materials Direct manufacturing labor Power Supervision labor Materials-handling labor All variable 36,250 43,500 20% variable 50% variable 50% variable 72,500 Maintenance labor 58,000 0% variable 92,000 Depreciation Rent, property taxes, and administration 0% variable 120,000 More Info a. Direct materials prices in 2018 are expected to increase by 8% compared with 2017. b. Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 12% in 2018 compared with 2017. c. Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change from 2017 to 2018. d. Depreciation costs are expected to increase by 6%, and rent, property taxes, and administration costs are expected to increase by 9%. e. Gower expects to manufacture and sell 77,500 units in 2018. - Requirements 1. Prepare a schedule of variable, fixed, and total manufacturing costs for each account category in 2018. Estimate total manufacturing costs for 2018. 2. Calculate Gower'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 these better estimates be useful to Gower? 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. 2017 2018 Variable unit [0 Total cost X Variable % of cost ) - Total units prod. ] * 100% + % increase = cost in 2018 Now calculate the variable unit cost in 2018. (Round the unit cost to the nearest cent. Complete all input fields. If an account does not have a variable unit cost, enter 0.) Variable unit Account cost in 2018 Direct materials 4.32 Direct manufacturing labor 2.80 Power 0.50 0.12 Supervision labor Materials-handling labor Maintenance labor 0.50 0.40 0 Depreciation Rent, prop. taxes, and admin. Prepare a schedule of variable, fixed, and total manufacturing costs for each account category in 2018. (Round the costs to the nearest dollar. Complete all input fields. Enter a zero if the account does not have a balance.) Prepare a schedule of variable, fixed, and total manufacturing costs for each account category in 2018. (Round the costs to the nearest dollar. Complete all input fields. Enter a zero if the account does not have a balance.) Total variable Account costs in 2018 Direct materials 1,252,800 507,500 Direct manufacturing labor Power Supervision labor Materials-handling labor Maintenance labor Depreciation Rent, prop. taxes, and admin. Total Enter any number in the edit fields and then click CheckStep by Step Solution
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