Gower, Inc., a manufacturer of plastic products, reports the following manufacturing costs and accou

Feb 3rd, 2012
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Walsh College of Accountancy and Business Administration
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Gower, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2012. Account Classification Amount Direct materials All variable $300,000 Direct manufacturing labor All variable 225,000 Power All variable 37,500 Supervision labor 20% variable 56,250 Materials-handling labor 50% variable 60,000 Maintenance labor 40% variable 75,000 Depreciation 0% variable 95,000 Rent, property taxes, and administration 0% variable 100,000 Gower, Inc., produced 75,000 units of product in 2012. Gower’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 5% compared with 2012. b. Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 10% in 2013 compared with 2012. c. Power rates and wage rates for supervision, materials han

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