Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost

Question

Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are $9.2000000 per lamp Figurines Electrical Sets Lamp Shade Direct Labor Variable Overhead Fixed Overhead 1.2500000 per lamp 6.0000000 per lamp 2.2500000 per lamp (4 Lamps/hr.) 0.2250000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp $28.9250000 per lamp Expected increases for 2017 When calculating projected increases round to SEVEN decimalplaces,$0.0000000 1, Material costs are expected to increase by 3.50%. 2, Labor Costs are expected to increase by 3.00%. 3. Variable Overhead is expected to increase by 500%. 4. Fixed Overhead is expected to Increase to $255,000 5. Fixed Administrative expenses are expected to Increase to $46,000 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 5.50%. 7. Fixed selling expenses are expected to be $31,000 in 2017 8. Variable administrative expenses (measured aper lamp basis) are expected to Increase by 3.00%. On the following schedule develop the following figures: 1- 2017 Projected Variable Manufacturing Unit Cost of a lamp. 2- 2017 Projected Variable Unit Cost per lamp 3- 2017 Projected Fixed Costs.

Explanation / Answer

Betty's Sign Schedule of Project Costs Variable Manufacturing unit Cost 2016 Cost Projected % Increase 2017 Cost rounded to 7 decimal places Figurines $9.2000000 3.50% $9.5220000 Electrical Sets $1.2500000 3.50% $1.2937500 Lamp Shade $6.0000000 3.50% $6.2100000 labor $2.2500000 3.00% $2.3175000 Variable overhead $0.2250000 5.00% $0.2362500 Projected Variable Manufacturing Cost per Unit $18.9250000 $19.5795000 Total Variable Cost per unit 2016 Cost Projected % Increase 2017 Cost rounded to 7 decimal places Variable Selling $3.1500000 5.50% $3.3232500 Variable Administrative $0.0600000 3.00% $0.0618000 Projected Variable Manufacturing Cost per Unit $18.9250000 $19.5795000 Projected Total Variable Per Unit $22.1350000 $22.9645500 Schedule of Fixed Costs 2016 Cost Projected % Increase 2017 Cost rounded to 7 decimal places Fixed overhead $250,000.0000000 $0.02 $255,000.0000000 (normal capacity of 25000 lamps @ 10    ) Fixed Administrative Expense $46,000.0000000 Fixed Selling Expense $31,000.0000000 Projected Total Fixed Cost $332,000.0000000

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