Question

In: Accounting

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 $ 330,000 Direct labor 265,000 Variable overhead 235,000 Production was 190,000 units. Fixed manufacturing overhead was $727,000. 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 152,000 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.)

Solutions

Expert Solution

Given data :
Past year Coming year
Production 190000 units 152000 units
DM 330000 20% increase
DL 265000 4% increase
VOH 235000 p.u remains same
FMOH 727000 10% increase
a. Cost estimate for a volume level of 152,000 units of product for the coming year:
Direct material cost = $330,000+($330,000*20%)
DMC                              = $396,000
Direct labour cost   = $265,000+($265,000*4%)
DLC                       = $275,600
Variable Overhead = ($235,000/190,000units)*152,000units
VOH Cost              =$188,000
Fixed Manufacturing Overhead= $727,000+($727,000*10%)
FOH Cost              =$799,700
b. Cost per unit last year:
DM $       3,30,000
DL $       2,65,000
VOH $       2,35,000
FMOH $       7,27,000
Total Cost $      15,57,000
Cost per unit = $1,557,000/190,000 units
= $              8.19
Cost per unit coming year:
DM $       3,96,000
DL $       2,75,600
VOH $       1,88,000
FMOH $       7,99,700
Total Cost $      16,59,300
Cost per unit = $1,659,300/152,000 units
= $            10.92

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

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 $ 360,000 Direct labor 266,000 Variable overhead 236,000 Production was 180,000 units. Fixed manufacturing overhead was $838,000. 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....
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 $ 310,000 Direct labor 269,000 Variable overhead 233,000 Production was 150,000 units. Fixed manufacturing overhead was $819,000. 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....
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 $ 360,000 Direct labor 268,000 Variable overhead 233,000 Production was 180,000 units. Fixed manufacturing overhead was $843,000. 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....
Records at Hal’s Accounting Services show the following costs for year 1: Direct materials and supplies...
Records at Hal’s Accounting Services show the following costs for year 1: Direct materials and supplies $ 47,000 Employee costs 2,900,000 Total overhead 1,300,000 Production was 25,000 billable hours. Fixed overhead was $760,000. Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 15 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected...
Records at Hal’s Accounting Services show the following costs for year 1. Direct materials and supplies...
Records at Hal’s Accounting Services show the following costs for year 1. Direct materials and supplies $ 43,000 Employee costs 2,700,000 Total overhead 1,390,000 Production was 25,000 billable hours. Fixed overhead was $800,000. Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 15 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected...
The following information relates to Osceola Corporation for the past accounting period.     Direct costs Service...
The following information relates to Osceola Corporation for the past accounting period.     Direct costs Service Dept A $80,000 Service Dept B 60,000 Producing Dept C 15,000 Producing Dept D 20,000 Proportion of service by A to: Proportion of service by B to: B 10% A 30% C 60% C 20% D 30% D 50% Using the reciprocal method, Department B's cost allocated to Department C is: $29,021 $14,021 $13,192 $7,794
The accounting records of Omar Company contained the following information for last year: Beginning Ending Direct...
The accounting records of Omar Company contained the following information for last year: Beginning Ending Direct materials inventory........................ $9,000 $7,000 Work in process inventory....................... $17,000 $31,000 Finished goods inventory........................ $10,000 $15,000 Manufacturing costs incurred Direct materials used............................... $72,000 Overhead applied..................................... $24,000 Direct labor cost (10,000 hours).............. $80,000 Depreciation............................................. $10,000 Rent......................................................... $12,000 Taxes........................................................ $8,000 Cost of goods sold................................... $157,000* * Selling and administrative costs incurred Advertising.............................................. $35,000 Rent......................................................... $20,000 Clerical..................................................... $25,000 *Does not include over- or underapplied overhead.         1.    The...
Myles Manufacturing Company's accounting records reflect the following inventories:                              &
Myles Manufacturing Company's accounting records reflect the following inventories:                                                 Dec. 31, 2014             Dec. 31, 2013 Raw materials inventory        $620,000                     $820,000 Work in process inventory     300,000                     220,000 Finished goods inventory       380,000                     100,000 During 2014, $900,000 of raw materials were purchased, direct labor costs amounted to $1,000,000, indirect labor costs amounted to $300,000, and manufacturing overhead was $960,000. Based upon the above information, cost of goods sold for the year is:
In the past, the Roils Royally Engine Division (Roils) allocated indirect manufacturing costs based on direct...
In the past, the Roils Royally Engine Division (Roils) allocated indirect manufacturing costs based on direct labour hours. Recently, management has decided to pilot a system of time-driven activity-based costing (TDABC) to allocate these costs. The division produces three engine models: Basic, Sport, and Heavy Duty. Roils employs 300 employees to perform indirect labour functions, consisting of machine setups, engine inspections and shipping. Each employee is paid $50,000 per year on average, including benefits. On average, each employee works 1,600...
West Manufacturing Company uses a standard cost system in its accounting records. The standard costs for...
West Manufacturing Company uses a standard cost system in its accounting records. The standard costs for its one product are as follows:                      Materials                                    8 pounds at $1.00 =   $ 8.00                      Direct labor                              1.2 hours at $14.00 =     16.80                      Variable overhead     1.2 direct-labor hours at $4.00 =       4.80                      Fixed overhead         1.2 direct-labor hours at $6.00 =       7.20                      Total standard cost                                                      $36.80             The standard costs per unit are based on normal capacity of 3,600 direct-labor...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT