Question
The accounting records for Portland Products report the following manufacturing costs for the past year: Direct...
The accounting records for Portland Products report the
following manufacturing costs for the past year:
| Direct materials | $ | 300,000 | |
| Direct labor | 264,000 | ||
| Variable overhead | 234,000 | ||
Production was 130,000 units. Fixed manufacturing overhead was $796,000.
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.
Required:
a. Prepare a cost estimate for a volume level of 104,000 units of product this year. (Do not round intermediate computations.)
b. Determine the costs per unit for last year
and for this year. (Round your answers to 2 decimal
places.)
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