A consulting firm\'s accounting records show the following costs for year 1: Pro

Question

A consulting firm's accounting records show the following costs for year 1: Production was 159.000 billable hours. Fixed overhead was 5247.000 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 204.000 billable hours What are the estimated direct materials. direct labor, variable overhead, and fixed overhead costs for year 2? (Do not round your intermediate computations. Round your final answers to nearest whole dollar amount)

Explanation / Answer

Direct Materials 165000 Direct Labor 62000 Total Overhead 438000 Production 159000 hours Fixed ovrhd 247000 Cost per hour : Variable overhead 2.754717 Direct Materials 1.037736 Direct Labor 0.389937 Revised Cost for Year 2 : Variable overhead 2.754717 Direct Materials 1.141509 Direct Labor 0.448428 Cost for Year 2 for 204000 Billable hours : Variable overhead 561962.3 Direct Materials 232867.9 Direct Labor 91479.25 Fixed overhead 247000 TOTAL COSTS : 1133309

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