Exercise 5-29 Methods of Estimating Costs: Engineering Estimates (LO 5-2) Twain Services offers leadership training for local companies. It employs three levels of seminar leaders, based on experience, education, and management level being targeted: guru, mentor, and helper. When Twain bids on requests for seminars, it estimates the costs using a set of standardized billing rates. It then adds an estimate for travel, supplies, and so on (referred to as out-of-pocket costs). Next it applies a percentage to the total of seminar leader cost and out-of- pocket cost for general and administrative (G&A) expense. The estimates for each of these elements are shown below: Guru cost per hour) Mentar cast per haur) Helger cost per hour) G&A factor $750 5400 $105 1805 Required: Marcus Foundries has asked Twain for a set of seminars for managers at several levels. The bidding manager at Twain estimates that the work will require 30 guru-hours, 170 mentor-hours, and 450 helper-hours. She estimates out-of-pocket costs to be $39,000. What is the estimated cost of the proposed seminars, based on these estimates? Guru cost Mentar cast Helper cost Out-of-pocket cos! Estimated consultant and miscellaneous cost C&A costs Estimated costs Exercise 5-30 Methods of Estimating Costs: Account Analysis (LO 5-3) The accounting records for Portland Products report the following manufacturing costs for the past year: $ Direct materials Direct labor Variable overhead 370,000 247,000 234.000 Production was 180.000 units. Fixed manufacturing overhead was $750,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes, direct labor by 4 percent; and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same. Required: a. Prepare a cost estimate for a volume level of 144,000 units of product this year. (Do not round Intermediate computations.) T his Year's Cost Cost Item Direct materials Direct labor Variable overhead Fixed overhead Total costs b. Determine the costs per unit for last year and for this year. (Round your answers to 2 decimal places.) Costs Per Unit Last year This year Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations: Month Labor-Hours 725 715 70 Machine-Hours 1,360 1.411 Overheid Costs S 102.792 103 926 109 939 108.305 116.256 760 Name 1.446 1.595 1.570 1.399 1.309 1.462 1.553 1,284 1.609 715 800 870 114.401 100.933 102.038 106 475 113.989 98.846 114 482 710 Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. (Round "Variable cost" answer to 2 decimal places.) Variable cast (per machine hour) Fixed cost b. Managers expect the plant to operate al a monthly average of 1,600 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? (Round Variable cost" answer to 2 decimal places.) Overhead costs