The Following Manufacturing Costs Were Incurred by the Trinitram Company

The following manufacturing costs were incurred by the Trinitram Company in 2019:
$$\begin{array} { l r } \text { Direct materials } & \$ 112,500 \\\text { Direct labor } & 175,000 \\\text { Manufacturing overhead } & 235,000\end{array}$$
These costs were incurred to produce 25,000 units of product. Variable manufacturing overhead was 80% of the direct materials cost.
In 2020, the direct material and variable overhead costs per unit will increase by 15%, but the direct labor costs per unit are not expected to change. Fixed manufacturing costs are expected to increase by 7.5%.
Required:
(a.) Prepare a cost estimate for an activity level of 20,000 units of product in 2020.
(b.) Determine the total product costs per unit for 2019 and 2020.

Correct Answer:

Verified

(a.)
Variable overhead costs (2019) = 0....

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