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Question - The accounting records for Portland Products report the following manufacturing costs for the past year.
Direct materials
$380,000
Direct labor
266,000
Variable overhead
236,000
Production was 180,000 units. Fixed manufacturing overhead was $868,000.
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. Cost estimate for a volume level of 144,000 units of product this year.
b. Determine the costs per unit for last year and for this year.
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