Bush incorporated, a manufacturing company reports
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Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Bush incorporated, a manufacturing company reports
Accounting 347
Cost Behavior Project – Second Project
Winter 2019
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.
- Direct materials prices in 2019 are expected to increase by 5% compared with 2018.
- Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 10% in 2019 compared with 2018.
- Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change.
- Depreciation costs, rent, property taxes, and administration costs are expected to increase by 10%.
- The company expects to manufacture and sell 80,000 units in 2019.
Requirements:
- Prepare a schedule of variable and fixed cost for each of the costs and total manufacturing cost for 2018 and 2019.
- Calculate the company’s per unit cost for 2018 and 2019.
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