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1. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated manufacturing overhead cost per quarter? what is the estimated 2. Assuming the assumptions about cost behavior from the first three quarters hold for the fourth quarter? total fixed unit product cost constant, 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 year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.

1. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated manufacturing overhead cost per quarter? what is the estimated 2. Assuming the assumptions about cost behavior from the first three quarters hold for the fourth quarter? total fixed unit product cost constant, 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 year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kingsport Containers Company makes a single product with wide seasonal variations 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: Direct materials Direct labor Manufacturing overhead Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) ÷ (b) First $ 200,000 120,000 240,000 $ 560,000 160,000 $ 3.50 Quarter Second $ 100,000 60,000 216,000 $376,000 80,000 $ 4.70 Required 1 Required 2 Required 3 Required 4 Third $ 50,000 30,000 204,000 $ 284,000 Complete this question by entering your answers in the tabs below. 40,000 $7.10 Fourth $ 150,000 90,000 ? $? Management finds the variation in quarterly unit product costs to be confusing. Accordingly, you have been asked to find a more appropriate way of applying 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 total fixed manufacturing overhead cost per quarter? 120,000 $ ? 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 year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated total fixed manufacturing overhead cost per quarter? Fixed manufacturing overhead cost
Transcribed Image Text:Kingsport Containers Company makes a single product with wide seasonal variations 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: Direct materials Direct labor Manufacturing overhead Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) ÷ (b) First $ 200,000 120,000 240,000 $ 560,000 160,000 $ 3.50 Quarter Second $ 100,000 60,000 216,000 $376,000 80,000 $ 4.70 Required 1 Required 2 Required 3 Required 4 Third $ 50,000 30,000 204,000 $ 284,000 Complete this question by entering your answers in the tabs below. 40,000 $7.10 Fourth $ 150,000 90,000 ? $? Management finds the variation in quarterly unit product costs to be confusing. Accordingly, you have been asked to find a more appropriate way of applying 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 total fixed manufacturing overhead cost per quarter? 120,000 $ ? 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 year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated total fixed manufacturing overhead cost per quarter? Fixed manufacturing overhead cost
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