Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-3) The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials Direct labor Variable overhead $350,000 264,000 231,000 Production was 170,000 units. Fixed manufacturing overhead was $795,000. 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 136,000 units of product this year. b. Determine the costs per unit for last year and for this year.

Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-3) The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials Direct labor Variable overhead $350,000 264,000 231,000 Production was 170,000 units. Fixed manufacturing overhead was $795,000. 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 136,000 units of product this year. b. Determine the costs per unit for last year and for this year.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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