Suppose that Glass Creations computed its predetermined overhead rate on a quarterly basis instead of annually.

The following projections have been made for the year:

Estimated Estimated Quarterly Manufacturing Direct-Labor Predetermined Overhead Hours Overhead Rate FIPStQUAntet iam Matteo wabanes $ 50,000 a 2,000 ee ES i

second quarten:: 22%Bets. ne in 122,500 4 3,500 — 2 BSS Touthcuatters co Ges ia WES 100,000 4,000 ea Si Foumtimouaitene aie ae anes 87,500 2,500 2 BS BVA Mee Pepe se Set NSCS ENT Bs $360,000 12,000 One of Glass Creations’ most popular products, the blue heron window, requires the following direct inputs:

|DyigelepalaieWeye lie seen steer ORR CP otn ehe e en ee te $100 per unit Directiabonr(@:G22 pemNOUn)\ seis acteedesseaitsse hces ctte ve. 5 hrs per unit Direct labor (@S1S'MenihOun toes ictwea Feuect nthe Soncsins 1 hr per unit

a. Calculate the quarterly predetermined overhead rate for each quarter.

b. Determine the cost of opnoei ntbl ule uhaer on Uwinedo w if it is manufactured in February versus October.

C. Suppose that the company’s pricing policy calls for a 20 percent markup over cost. Calculate the price to 115 You're the Decision MEL Cg mM loot OL Q26S2 15 Oem 135) ISK = PX J22 charge for one blue heron window in February versus October. Lt 27S K1.2 GS) OcA- OH? F2t- eSNG ISO A

d. Calculate the predetermined overhead rate if it is calculated annually. Hlo+1a-G/ [3S X/.2= + 2es

e. Based on sy aes to part (d), what is the cost per unit if it is manufactured in February? In ee (FO i eA

f. Whatis theyp rice per heron window if the predetermined overhead rate is calculated annuallyfé Zz eae g. What do you recommend to Glass Creations for its product costing system? Quarterly or annual predeter- OR ee me:

mined overhead rates? Explain.