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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: Direct materials Direct labour Manufacturing overhead Total manufacturing costs Number of units to be produced Estimated unit product cost Predetermined overhead rate-unit of product Predetermined overhead rate-basis on direct labour 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. 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 Second Third Fourth $264,000 $132,000 $ 66,000 $198,000 132,000 66,000 33,000 99,000 184,800 158,400 145,200 171,600 $580,800 $356,400 $244,200 $468,600 88,000 44,000 22,000 66,000 7.10 6.60 $ 8.10 $ 11.10 $ $ First Quarter 2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to 2 decimal places.) Second Quarter Third per unit % Fourth

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: Direct materials Direct labour Manufacturing overhead Total manufacturing costs Number of units to be produced Estimated unit product cost Predetermined overhead rate-unit of product Predetermined overhead rate-basis on direct labour 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. 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 Second Third Fourth $264,000 $132,000 $ 66,000 $198,000 132,000 66,000 33,000 99,000 184,800 158,400 145,200 171,600 $580,800 $356,400 $244,200 $468,600 88,000 44,000 22,000 66,000 7.10 6.60 $ 8.10 $ 11.10 $ $ First Quarter 2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to 2 decimal places.) Second Quarter Third per unit % Fourth

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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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: 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 Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) Quarter First Second Third Fourth $264,000 $132,000 $ 66,000 $198,000 132,000 66,000 33,000 99,000 184,800 158,400 145,200 171,600 $580,800 $356,400 $244,200 $468,600 88,000 44,000 22,000 66,000 6.60 $ 8.10 $ 11.10 $ 7.10 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.) Second Quarter per unit % Third Fourth
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: 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 Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) Quarter First Second Third Fourth $264,000 $132,000 $ 66,000 $198,000 132,000 66,000 33,000 99,000 184,800 158,400 145,200 171,600 $580,800 $356,400 $244,200 $468,600 88,000 44,000 22,000 66,000 6.60 $ 8.10 $ 11.10 $ 7.10 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.) Second Quarter per unit % Third Fourth
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