Gorham, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2012.

Gorham, Inc., produced 72,500 units of product in 2012. Gorham's management is estimating costs for 2013 on the basis of 2012 numbers. The following additional information is available for 2013.
a. Direct materials prices in 2013 are expected to increase by 10% compared with 2012.
b. Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 5% in 2013 compared with 2012.
c. Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change from 2012 to 2013.
d. Depreciation costs are expected to increase by 8%, and rent, property taxes, and administration costs are expected to increase by 7%.
e. Gorham expects to manufacture and sell 82,500 units in 2013.
Required
1. Prepare a schedule of variable, fixed, and total manufacturing costs for each account category in 2013. Estimate total manufacturing costs for 2013.
2. Calculate Gorham's total manufacturing cost per unit in 2012, and estimate total manufacturing cost per unit in 2013.
3. How can you obtain better estimates of fixed and variable costs? Why would these better estimates be useful to Gorham?

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Account Classification All variable All variable All variable 20% variable 50% variable 50% variable 0% variable Amount Direct materials Direct manufacturing labor Power Supervision labor Materials-handling labor Maintenance labor Depreciation Rent, property taxes, and administration $290,000 181,250 36,250 43,500 72,500 58,000 100,000 110,000 0% variable