produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below: Direct materials Direct labor Manufacturing overhead First $ 240,000 128,000 300,000 $ 668,000 Required 1 Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) (b) Management finds the variation in quarterly unit product costs to be confusing. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product 80,000 $8.35 Required 2 Quarter Complete this question by entering your answers in the tabs below. Second $ 120,000 64,000 220,000 $ 404,000 40,000 $ 10.10 Third $ 60,000 32,000 180,000 $ 272,000 20,000 $13.60 Required: 1. Assuming the estimated variable manufacturing overhead cost per unit is $2.00, 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 cost for the fourth quarter? Required 3 Required 4 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. Fourth $ 180,000 96,000 X Answer is complete but not entirely correct. $ ? 60,000 $? 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. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Unit product cost $ 10.24 X
produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below: Direct materials Direct labor Manufacturing overhead First $ 240,000 128,000 300,000 $ 668,000 Required 1 Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) (b) Management finds the variation in quarterly unit product costs to be confusing. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product 80,000 $8.35 Required 2 Quarter Complete this question by entering your answers in the tabs below. Second $ 120,000 64,000 220,000 $ 404,000 40,000 $ 10.10 Third $ 60,000 32,000 180,000 $ 272,000 20,000 $13.60 Required: 1. Assuming the estimated variable manufacturing overhead cost per unit is $2.00, 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 cost for the fourth quarter? Required 3 Required 4 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. Fourth $ 180,000 96,000 X Answer is complete but not entirely correct. $ ? 60,000 $? 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. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Unit product cost $ 10.24 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Transcribed Image Text:produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
Direct materials
Direct labor
Manufacturing overhead
First
$ 240,000
128,000
300,000
$ 668,000
Required 1
Required 2
80,000
$8.35
Complete this question by entering your answers in the tabs below.
Quarter
Total manufacturing costs (a)
Number of units to be produced (b)
Estimated unit product cost (a) = (b)
Management finds the variation in quarterly unit product costs to be confusing. It has been suggested that the problem lies with
manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a
more appropriate way of assigning manufacturing overhead cost to units of product
Second
$ 120,000
64,000
220,000
Required 3 Required 4
Third
$ 60,000
32,000
180,000
$ 272,000
$ 404,000
40,000
$10.10
20,000
$13.60
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $2.00, 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 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.
X Answer is complete but not entirely correct.
Fourth
$ 180,000
96,000
?
60,000
$?
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. (Do not round intermediate calculations and round
your final answer to 2 decimal places.)
Unit product cost
$ 10.24 X
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 6 steps with 4 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