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San Diego State University Operations And Supply Chain Management Assignment Help - Corporation

Question - Exercise 5-24 Methods of Estimating Costs: Account Analysis (L.O. 3)
A consulting firm's accounting records show the following costs for year 1:

Direct materials (supplies) $ 360,000
Direct labor 2,580,000
Total overhead 1,140,000

Production was 150,000 billable hours. Fixed overhead was $600,000.

For year 2, direct materials costs are expected to increase by 10 percent per unit. 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 to increase by 5 percent.

Year 2 production is expected to be 195,000 billable hours. What are the estimated direct
materials, direct labor, variable overhead, and fixed ...Read More

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