Direct materials Direct labour Manufacturing overhead Total manufacturing costs Number of units to be produced Estimated unit product cost Management finds the variation in unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production. Predetermined overhead rate-unit of product Predetermined overhead rate-basis on direct labour cost $ 507,600 $253,800 $126,900 $380,700 63,450 190,350 Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) 253,800 126,900 338,400 310,200 296, 100 324,300 $1,099,800 $690,900 $486,450 $895,350 94,000 47,000 23,500 70,500 $ 11.70 $14.70 $ 20.70 $ 12.70 Estimated unit product cost First 2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to places.) Quarter Second per unit % Third Fourth decimal
Direct materials Direct labour Manufacturing overhead Total manufacturing costs Number of units to be produced Estimated unit product cost Management finds the variation in unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production. Predetermined overhead rate-unit of product Predetermined overhead rate-basis on direct labour cost $ 507,600 $253,800 $126,900 $380,700 63,450 190,350 Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) 253,800 126,900 338,400 310,200 296, 100 324,300 $1,099,800 $690,900 $486,450 $895,350 94,000 47,000 23,500 70,500 $ 11.70 $14.70 $ 20.70 $ 12.70 Estimated unit product cost First 2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to places.) Quarter Second per unit % Third Fourth decimal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text:Jacarda 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, labour, and overhead) by the quarter's production in units.
The company's estimated costs, by quarter, for the coming year are given below:
Quarter
Direct materials
Direct labour
Manufacturing overhead
Total manufacturing costs
Number of units to be produced
Estimated unit product cost
Management finds the variation in unit product costs to be confusing and difficult to work with. It has been suggested that the problem
lies with manufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate
way of assigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's
overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production.
Predetermined overhead rate-unit of product
Predetermined overhead rate-basis on direct labour cost
First
Second
Third
Fourth
$380,700
190,350
$ 507,600 $253,800 $126,900
253,800 126,900 63,450
338,400 310,200 296,100 324,300
$1,099,800 $690,900 $486,450 $895,350
94,000 47,000 23,500 70,500
11.70 $ 14.70 $ 20.70 $ 12.70
Required:
1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.)
$
Estimated unit product cost
First
2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to 2 decimal
places.)
Quarter
Second
per unit
%
Third
Fourth
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education