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Quention 4: acarda Company makes a composting bin that is subject to wide seasonal variations in demand. Unit product costs are computed on a quarterly basis by dividing each quarter's manufacturing costs (materials, Inbour, and overhead) by the quarter's production in units. The company's estimated costs, by quarter, for the coming year are kiven below: Management timas the tariation in unit product costs to be confusing and difficult to work with. it has been suggested that the problem lies with manufiacturing overhead, since it is the largest elemeat of cost. Accordingly, you have boen asked to find a more approptiate thay of assigning macufacturing overhead cost to units of prodinct. After sone analyais, you lave deternined that the coppony's overhead costs are mostly fixed and therefore abow little sensitikity to changes in the Jetel of production. Required: 1. Calculate the predeterminect overhend rate baied on units aisd direct faboue little sensitivity to changes in the level of production. Required; 1. Calculate the predetermined overhead rate based on units and direct labour. Dractatormuned merhead rale-10uit of onoduct Question 4: acarda Company makes a composting bin that is subject to wide seasonal variations in demand. Unit product costs are computed on a quarterly basis by dividing each quanter's manufacturing costs (materials, labonr, and overhead) by the quarter's production in units. The company"s estimated costs, by quarter, for the coming year are siven below: Mamagernegt fuds the varation an yent product costs to be confesing and difficult to work with. It has been sugkested that the problem lies with mamufactaring oterbead, since it is the Lageit element of cost. Aecoedingly. you have beha asked to fiad a more apgropriate woy of assitning manuacturing overbead cout to inits of prodoct. Afier scane analyrith, you have determined than the company'a oviediesd coabs are motily fixed yod therefore abow lirrle semifiving ro clanges in the fevel of production. Reguitredt 1. Cylcuinte the gredeterminest ounbead rate baged or unit and ditect labouf Required: 1. Calculate the prodetermined overhead mate based on units and dirret labour Predelermined otwerhad rate-wnt of broduct Predeferminedoverhogd rote-hanis on directlahoye cott 2. Recompuie the compasyis unit product costs in accordance with rate per unit in (il) above

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