Loucraft,

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

2020.

Loucraft,

Inc., produced

70,000

units of product in

2020.

Loucraft's

management is estimating costs for

2021

on the basis of

2020

numbers. The following additional information is available for

2021.

Account

Classification

Amount

Direct materials

All variable

$367,500

Direct manufacturing labor

All variable

297,500

Power

All variable

87,500

Supervision labor

20% variable

70,000

Materials-handling labor

60% variable

35,000

Maintenance labor

40% variable

70,000

Depreciation

0% variable

92,000

Rent, property taxes, and administration

0% variable

125,000

a.	Direct materials prices in 2021 are expected to increase by 4% compared with 2020.
b.	Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 12% in 2021 compared with 2020.
c.	Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change from 2020 to 2021.
d.	Depreciation costs are expected to increase by 6%, and rent, property taxes, and administration costs are expected to increase by 11%.
e.	Loucraft expects to manufacture and sell 77,500 units in 2021.