Response to the following problem:
The accounting records for Portland Products report the following manufacturing costs for the past year:
|
|
| Direct materials |
$ 315,000 |
| Direct labor |
262,500 |
| Variable overhead |
231,000 |
Production was 150,000 units. Fixed manufacturing overhead was $270,000.
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 120,000 units of product this year.(Do not round intermediate computations.)