Question: Exercise 5-32 (Static) Methods of Estimating Costs: Account Analysis (LO 5-1, 2) Hemlock Nutritional Supplements (HNS) provides you with the following accounting records on manufacturing

Exercise 5-32 (Static) Methods of Estimating Costs: Account Analysis (LO 5-1, 2)

Hemlock Nutritional Supplements (HNS) provides you with the following accounting records on manufacturing cost for the most recent month:

Direct materials	$ 126,000
Direct labor	105,000
Variable overhead	92,400

Production was 60,000 units (cases). Fixed manufacturing overhead was $144,000.

For the coming year, costs are expected to increase as follows: direct materials costs by 30 percent, excluding any effect of volume changes; direct labor by 6 percent; and fixed manufacturing overhead by 13.5 percent. Variable manufacturing overhead per unit is expected to remain the same.

Required:

a. Prepare a cost estimate for a volume level of 48,000 units of product in the upcoming month. b. Determine the costs per unit for the most recent month and for the upcoming month.

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