PART 1

Fixed and Variable Cost Determinations

Unit Cost Calculations

The projected cost of a lamp is calculated based upon the projected increases or decreases to

current costs. The present costs to manufacture one lamp are:

Lamp Kit:

$16.0000000

per lamp

Direct Labor:

2.0000000

per lamp (4 lamps/hr.)

Variable Overhead:

2.0000000

per lamp

Fixed Overhead:

10.0000000

per lamp (based on normal capacity of 25,000 lamps)

Cost per lamp:

$30.0000000

per lamp

Expected increases for 20x2

When calculating projected increases round to TWO ($0.00) decimal places.

1. Material Costs are expected to increase by 5.00% .

2. Labor Costs are expected to increase by 6.00%.

3. Variable Overhead is expected to increase by 6.00%.

4. Fixed Overhead is expected to increase to $290,000.

5. Fixed Administrative expenses are expected to increase to $60,000.

6. Variable selling expenses (measured on a per lamp basis) are expected to increase

by 5.00%.

7. Fixed selling expenses are expected to be $33,000 in 20x2.

8. Variable administrative expenses (measured a per lamp basis) are expected to

increase by 5.50%.

On the following schedule develop the following figures:

1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp.

2- 20x2 Projected Variable Unit Cost per lamp.

3- 20x2 Projected Fixed Costs.

Variable Manufacturing Unit Cost
	20x1 Cost	Projected Percent Increase	20x2 Cost Rounded to 2 Decimal Places
Lamp Kit
Labor
Variable Overhead
Projected Variable Manufacturing Cost Per Unit
Total Variable Cost Per Unit
	20x1 Cost	Projected Percent Increase	20x2 Cost Rounded to 2 Decimal Places
Variable Selling
Variable Administrative
Projected Variable Manufacturing Unit Cost
Projected Total Variable Cost Per Unit
Schedule of Fixed Costs
	20x1 Cost	Projected Percent Increase	20x2 Cost
Fixed Overhead
(normal capacity of _________ lamps @ __ )
Fixed Selling
Fixed Administrative
Projected Total Fixed Costs