4 5 points Exercise 2-11 (Algo) Varying Plantwide Predetermined Overhead Rates (LO2-1, LO2-2, LO2-3] Kingsport Containers...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
4 5 points Exercise 2-11 (Algo) Varying Plantwide Predetermined Overhead Rates (LO2-1, LO2-2, LO2-3] Kingsport Containers Company makes a single product that is subject to 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. Quarter Direct materials Direct labor Manufacturing overhead Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) (6) First $ 200,000 120,000 230,000 $ 550,000 120,000 $4.50 Second $ 100,000 60,000 206,000 5 366,000 60,000 $6.10 Third Fourth $50,000 $150,000 90,000 7 30,000 194,000 $ 274,000 $7 90,000 30,000 $9.13 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 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 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. 4 5 points Exercise 2-11 (Algo) Varying Plantwide Predetermined Overhead Rates (LO2-1, LO2-2, LO2-3] Kingsport Containers Company makes a single product that is subject to 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. Quarter Direct materials Direct labor Manufacturing overhead Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) (6) First $ 200,000 120,000 230,000 $ 550,000 120,000 $4.50 Second $ 100,000 60,000 206,000 5 366,000 60,000 $6.10 Third Fourth $50,000 $150,000 90,000 7 30,000 194,000 $ 274,000 $7 90,000 30,000 $9.13 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 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 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.
Expert Answer:
Answer rating: 100% (QA)
Sure Lets calculate the answers based on the given information 1 Calculating the estimated total fixed manufacturing ... View the full answer
Related Book For
Holes Human Anatomy and Physiology
ISBN: 978-0078024290
14th edition
Authors: David Shier, Jackie Butler, Ricki Lewis
Posted Date:
Students also viewed these accounting questions
-
Label the structures of the bone. Intercondylar fossa Medial condyle Linea aspera Pectineal line Lateral supracondylar line Femur Medial supracondylar line Gluteal tuberosity Lateral condyle Reset...
-
10 0.52 P Label the structures of the plasma membrane and cytoskeleton. Type here to seech Intermediate Nament Microvillus Microfilament Cilium Microtubule Centrosome Plasma < Prey 10 of 19 Next
-
A. Labeling 6 8 9 23 4 7 5 10 3- 1. Label the structures of the integument. 1 w vi 10 11 12 13
-
A 60-kHz radio transmitter sends an electromagnetic wave to a receiver 21 km away. The signal also travels to the receiver by another path where it reflects from a helicopter as shown. Assume that...
-
Mannerman Fabrication manufactures a variety of products in its factory. Data for the most recent months operations appear below: Beginning raw materials inventory . . . . . . . . . . $ 55,000...
-
Lydia purchased a $100,000 150-day T-bill when the prevailing yield on T-bills was 4.5%. She sold the T-bill 60 days later when the prevailing yield was 4.2%. What interest rate did Lydia earn during...
-
The following information has been extracted from the books of account of Billinge plc as at 30 June 2006: Additional information: 1. The company was incorporated in 2000. 2. The stock at 30 June...
-
Bronkowski is a retailer for high-tech recording disks. The projected operating profit for the current year is $200,000 based on a sales volume of 200,000 units. The company has been selling the...
-
Q.1 xyz company provides transportation between major airports in various business centers. Transactions during the month of April 2013 are as below: 1. On April 3rd the owner deposited $ 80,000/-...
-
On January 1, 2023, Logan Limited had shares outstanding as follows: 6% cumulative preferred shares, $100 par value, 10,000 shares issued and outstanding $1,000,000 Common shares, 200,000 shares...
-
Outline the following for your particular organisation: Designated response times for providing service and resolving complaints Customer service policies and procedures Complaint handling policies...
-
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total...
-
Peter Piper produces three types of jam. APPLE, BANANA, and CHICO. These jams come from a joint process, each of which can be sold immediately or processed further. The monthly output is 50,000 jar;...
-
eRide is an electric bicycle manufacturer in Australia. The plant currently employs 20 workers who operate for 20 days a month for 9 hours in each day. Workers are paid $10 per hour for normal...
-
Riverdale manufactured ladies apparel. Charges to work in process account show: Direct materials used 341,000 Direct labor costs 324,500 Factory overhead 259,600 At the end of the period, two orders...
-
A company reported the following information in its financial statements: Cash 225,000 Insurance or negotiable securities 59,600 Accounts receivable (net) 78,650 Inventory 148,500 Accounts payable...
-
As the economy weakens, one would expect investment in ____________ funds to increase and investment in _____________ funds to decrease, all else held constant. a corporate bond; municipal bond b...
-
The tractor is used to lift the 150-kg load B with the 24-mlong rope, boom, and pulley system. If the tractor travels to the right at a constant speed of 4 m/s, determine the tension in the rope when...
-
Explain how the oxidation of molecules inside cells differs from the burning of substances outside cells.
-
Name some medical conditions that affect the ability to obtain adequate nutrition as a person ages.
-
Describe two factors other than the nervous system that affect the cardiac cycle.
-
Use your calculator to calculate \((-18)+11\). Explain how the answer agrees with what was expected.
-
Calculate \(|-81|\).
-
Calculate \(|38|\).
Study smarter with the SolutionInn App