Accounting Assignment: Cost Behavior Project - Second Project
Bush incorporated, a manufacturing company reports the following actual costs for the year ended December 31, 2018.
|
Account
|
Classification
|
Cost
|
|
Direct materials
Direct manufacturing labor
Power
Supervision labor
Materials-handling labor
Maintenance labor
Depreciation
Rent, property taxes, admin
|
All Variable
All Variable
All Variable
20% Variable
50% Variable
40% Variable
All Fixed
All Fixed
|
$300,000
225,000
37,500
56,250
60,000
75,000
95,000
100,000
|
The company produced 75,000 units in 2018 and the management is estimating the costs for 2019 using the information from 2018. The following additional information is available for 2019.
a. Direct materials prices in 2019 are expected to increase by 5% compared with 2018.
b. Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 10% in 2019 compared with 2018.
c. Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change.
d. Depreciation costs, rent, property taxes, and administration costs are expected to increase by 10%.
e. The company expects to manufacture and sell 80,000 units in 2019.
Requirements:
1. Prepare a schedule of variable and fixed cost for each of the costs and total manufacturing cost for 2018 and 2019.
2. Calculate the company's per unit cost for 2018 and 2019.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.