For year 2, direct materials costs are expected to increase by 10 percent per unit. Direct labor costs are expected to increase by 15 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected to increase by 5 percent.

Year 2 production is expected to be 195,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? (Do not round intermediate calculations. Omit the "$" sign in your response.)

Determine the total costs per billable hour for year 1 and year 2. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

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:

Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. (Round your variable cost answer to 2 decimal places. Omit the "$" sign in your response.)

Managers expect the plant to operate at a monthly average of 7,500 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? (Use rounded variable cost. Omit the "$" sign in your response.)

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:

Estimate overhead if the company expects the plant to operate at a monthly average of 3,000 labor-hours next year. (Omit the "$" sign in your response.)

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:

Estimate overhead using the multiple regression results, assuming that the company expects the plant to operate at a monthly average of 9,000 machine-hours and 3,000 labor-hours next year. (Omit the "$" sign in your response.)

Hartman Company's Lucas plant manufactures thermostatic controls. Plant management has experienced fluctuating monthly overhead costs and wants to estimate overhead costs accurately to plan its operations and its financial needs. Interviews with plant personnel and studies reported in trade publications suggest that overhead in this industry tends to vary with labor-hours.

A member of the controller's staff proposed that the behavior pattern of these overhead costs be determined to improve cost estimation. Another staff member suggested that a good starting place for determining cost behavior patterns is to analyze historical data. Following this suggestion, monthly data were gathered on labor-hours and overhead costs for the past two years. No major changes in operations occurred over this period of time. The data are shown in the following table:

Use the high-low estimation method to estimate the overhead cost behavior (fixed and variable portions components of cost) for the Lucas plant. (Round your fixed cost to the nearest dollar amount and the variable cost to 5 decimal places. To calculate the fixed costs, use highest activity level. Omit the "$" sign in your response.)

Use a spreadsheet program to compute regression coefficients to describe the overhead cost equation. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Use the results of your regression analysis to develop an estimate of overhead costs assuming 350,000 labor-hours will be worked next month. (Round your Labor Hours to 2 decimal places for intermediate calculation. Round your final answer to the nearest dollar amount. Omit the "$" sign in your response.)