Spaine Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the company's production and sales occur in the first and second quarters of the year. The company is in danger of losing one of its larger customers, Sofo Wholesale, due to large fluctuations in price. The owner of Spaine has requested an analysis of the manufacturing cost per unit in the second and third quarters. You have been provided the following budgeted information for the coming year. EE (Click the icon to view the budgeted information.) i (Click the icon to view additional information.) Read the requirements. Requirement 1 and 2. Calculate the total manufacturing cost per unit for the second and third quarter assuming the company allocates manufacturing overhead costs based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate. First identify the formula to calculate the total manufacturing cost per unit, then enter the appropriate amounts to calculate the total cost per unit for second and third quarter based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate for the year. (Abbreviation used: OH = overhead, mat. = materials, and Var. = variable.) Qtr 2 Qtr 3 Annual Direct labor per unit+ Direct mat. per unit More Info + Var. OH per unit X It takes 1 direct manufacturing labor-hour to make each board. The actual direct material cost is $10.00 per board. The actual direct manufacturing labor rate is $24 per hour. The budgeted variable manufacturing overhead rate is $17 per direct manufacturing labor-hour. Budgeted fixed manufacturing overhead costs are $7,500 each quarter. + Fixed OH per unit Data Table = Total cost per unit Surfboards manufactured and sold 1 775 Quarter 2 300 3 250 4 175 X methods described in requirements 1 and 2 would you recommend hot vary based on quarterly fluctuations in production. ?
Spaine Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the company's production and sales occur in the first and second quarters of the year. The company is in danger of losing one of its larger customers, Sofo Wholesale, due to large fluctuations in price. The owner of Spaine has requested an analysis of the manufacturing cost per unit in the second and third quarters. You have been provided the following budgeted information for the coming year. EE (Click the icon to view the budgeted information.) i (Click the icon to view additional information.) Read the requirements. Requirement 1 and 2. Calculate the total manufacturing cost per unit for the second and third quarter assuming the company allocates manufacturing overhead costs based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate. First identify the formula to calculate the total manufacturing cost per unit, then enter the appropriate amounts to calculate the total cost per unit for second and third quarter based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate for the year. (Abbreviation used: OH = overhead, mat. = materials, and Var. = variable.) Qtr 2 Qtr 3 Annual Direct labor per unit+ Direct mat. per unit More Info + Var. OH per unit X It takes 1 direct manufacturing labor-hour to make each board. The actual direct material cost is $10.00 per board. The actual direct manufacturing labor rate is $24 per hour. The budgeted variable manufacturing overhead rate is $17 per direct manufacturing labor-hour. Budgeted fixed manufacturing overhead costs are $7,500 each quarter. + Fixed OH per unit Data Table = Total cost per unit Surfboards manufactured and sold 1 775 Quarter 2 300 3 250 4 175 X methods described in requirements 1 and 2 would you recommend hot vary based on quarterly fluctuations in production. ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Spaine Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the company's production and sales occur in the first and second
quarters of the year. The company is in danger of losing one of its larger customers, Sofo Wholesale, due to large fluctuations in price. The owner of Spaine has requested an analysis of the manufacturing cost per unit in the second and third quarters. You
have been provided the following budgeted information for the coming year:
(Click the icon to view the budgeted information.)
(Click the icon to view additional information.)
Read the requirements.
Requirement 1 and 2. Calculate the total manufacturing cost per unit for the second and third quarter assuming the company allocates manufacturing overhead costs based on the budgeted manufacturing overhead rate determined for each quarter and an
annual budgeted manufacturing overhead rate.
First identify the formula to calculate the total manufacturing cost per unit, then enter the appropriate amounts to calculate the total cost per unit for second and third quarter based on the budgeted manufacturing overhead rate determined for each quarter and
an annual budgeted manufacturing overhead rate for the year. (Abbreviation used: OH = overhead, mat. = materials, and Var. = variable.)
Qtr 2
Qtr 3
Annual
Direct labor per unit
i More Info
+
+
+
+
Direct mat. per unit
Print
+
Done
+
Var. OH per unit
-
It takes 1 direct manufacturing labor-hour to make each board. The actual direct
material cost is $10.00 per board. The actual direct manufacturing labor rate is
$24 per hour. The budgeted variable manufacturing overhead rate is $17 per direct
manufacturing labor-hour. Budgeted fixed manufacturing overhead costs are
$7,500 each quarter.
X
+
Fixed OH per unit
i Data Table
Total cost
per unit
Surfboards manufactured and sold
Print
1
775
Done
Quarter
2
300
3
250
4
175
- X methods described in requirements 1 and 2 would you recommend
hot vary based on quarterly fluctuations in production.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F800f14bf-2dac-4c27-8e50-ffc89f4e7038%2Fab74ff38-d92c-4757-af23-e73e6e1662a0%2Fjj0ajti_processed.png&w=3840&q=75)
Transcribed Image Text:Spaine Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the company's production and sales occur in the first and second
quarters of the year. The company is in danger of losing one of its larger customers, Sofo Wholesale, due to large fluctuations in price. The owner of Spaine has requested an analysis of the manufacturing cost per unit in the second and third quarters. You
have been provided the following budgeted information for the coming year:
(Click the icon to view the budgeted information.)
(Click the icon to view additional information.)
Read the requirements.
Requirement 1 and 2. Calculate the total manufacturing cost per unit for the second and third quarter assuming the company allocates manufacturing overhead costs based on the budgeted manufacturing overhead rate determined for each quarter and an
annual budgeted manufacturing overhead rate.
First identify the formula to calculate the total manufacturing cost per unit, then enter the appropriate amounts to calculate the total cost per unit for second and third quarter based on the budgeted manufacturing overhead rate determined for each quarter and
an annual budgeted manufacturing overhead rate for the year. (Abbreviation used: OH = overhead, mat. = materials, and Var. = variable.)
Qtr 2
Qtr 3
Annual
Direct labor per unit
i More Info
+
+
+
+
Direct mat. per unit
Print
+
Done
+
Var. OH per unit
-
It takes 1 direct manufacturing labor-hour to make each board. The actual direct
material cost is $10.00 per board. The actual direct manufacturing labor rate is
$24 per hour. The budgeted variable manufacturing overhead rate is $17 per direct
manufacturing labor-hour. Budgeted fixed manufacturing overhead costs are
$7,500 each quarter.
X
+
Fixed OH per unit
i Data Table
Total cost
per unit
Surfboards manufactured and sold
Print
1
775
Done
Quarter
2
300
3
250
4
175
- X methods described in requirements 1 and 2 would you recommend
hot vary based on quarterly fluctuations in production.
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