90.2K

Verified Solution

Link Copied!

3 Kingsport Containers Company makes a single product that is subject to wide seasonal orations in demand The company uses a Job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs by quarter, for the coming year are given below 10 Pri Quarter First Second Fosirth Direct material $ 140,000 120.000 $60,000 $ 110,000 Direct Iwtor 120,000 60,000 30.000 90.000 Mufacturing overhead 230,000 200.000 1940 2 Tatal manufacturing costs() $ 550,000 $ 386.000 $ 284,000 Number of wits to the produced (b) 160,000 B. 10,000 120,000 Estimated product kost () () $3.09 $ 2.10 Management finds the variation in quarterly unit product costs to be confusing. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product Required: 1. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated totalted manufacturing overhead cost per quarter? 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? 4. Assuming the company computes one predetermined overhead rate for the yem rather than computing quarterly overhead rates. calculate the unit product cost for all units produced during the year. Complete this question by entering your answers in the tabs below Required 1 Required 2 Required Regowed 4 Assumine the estimated variable manufacturing overhead cost for unit is $0.30. what must be the estimated total fixed MC Grow Hill

Answer & Explanation Solved by verified expert

See Answer