pany uses a job-order Kingsport Containers Company makes a single product with wide seasonal variations in dem nd. The costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be prod 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 $ 320,000 80,000 220,000 $ 620,000 Fixed manufacturing overhead cost 120,000 $5.17 Complete this question by entering your answers in the tabs below. $ Quarter Second $ 160,000 40,000 196,000 $ 396,000 60,000 $ 6.60 268,000 Third $ 80,000 20,000 184,000 $ 284,000 30,000 $ 9.47 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 $0.40, what must be the estimated total fixed 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 c 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 rat calculate the unit product cost for all units produced during the year. Fourth $ 240,000 60,000 ? $? Required 1 Required 2 Required 3 Required 4 Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? 90,000 $?

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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wrong answer. from 1 to 4. 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: 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: Assuming the estimated variable
manufacturing overhead cost per unit is $0.40, what must be
the estimated total fixed manufacturing overhead cost per
quarter? Assuming the assumptions about cost behavior from

the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? What is causing the estimated unit product cost to fluctuate from one quarter to the next? 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. Complete this question by entering your answers in the tabs below. Assuming the estimated variable manufacturing overhead
cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter?

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
$ 320,000
80,000
220,000
$ 620,000
120,000
$ 5.17
Quarter
Second
$ 160,000
40,000
196,000
$ 396,000
Required 1 Required 2 Required 3 Required 4
60,000
$ 6.60
Complete this question by entering your answers in the tabs below.
$
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 $0.40, what must be the estimated total fixed
manufacturing overhead cost per quarter?
Third
$ 80,000
20,000
184,000
$ 284,000
30,000
$9.47
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?
268,000
Fourth
$ 240,000
60,000
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.
?
$ ?
90,000
$ ?
Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed
manufacturing overhead cost per quarter?
Fixed manufacturing overhead cost

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