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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. Estimated unit product cost First Second Third Fourth 554,400 $277,200 $138,600 $415,800 277, 200 138,600 69,300 207,900 365,400 340,200 327,600 352,800 $1,197,000 $756,000 $535,500 $976,500 84,000 42,000 21,000 63,000 14.25 $ 18.00 $25.50 $ 15.50 $ Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) First $ Second 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.) 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. Estimated unit product cost First Second Third Fourth 554,400 $277,200 $138,600 $415,800 277, 200 138,600 69,300 207,900 365,400 340,200 327,600 352,800 $1,197,000 $756,000 $535,500 $976,500 84,000 42,000 21,000 63,000 14.25 $ 18.00 $25.50 $ 15.50 $ Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) First $ Second 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.) Quarter Third per unit % Fourth

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 15E: Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing...
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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 Second First Third Fourth $ 554,400 $277,200 $138,600 $415,800 277, 200 138,600 69,300 207,900 365,400 340,200 327,600 352,800 $1,197,000 $756,000 $535,500 $976,500 84,000 42,000 21,000 63,000 14.25 $ 18.00 $25.50 $ 15.50 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 Second First Third Fourth $ 554,400 $277,200 $138,600 $415,800 277, 200 138,600 69,300 207,900 365,400 340,200 327,600 352,800 $1,197,000 $756,000 $535,500 $976,500 84,000 42,000 21,000 63,000 14.25 $ 18.00 $25.50 $ 15.50 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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