Determine the costs per unit for last year and for this year

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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.

Reference no: EM133173552

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