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
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.
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. 180 6800 Quarter Direct materials What is causing the estimated unit product cost to fluctuate from one quarter to the next? Manufacturing overhead The fixed portion of the manufacturing overhead cost is causing the unit product costs to fluctuate. The unit product cost increases as the level of tal manufacturing costs (a) roduction decreases because the fixed overhead is spread over fewer units. Estimated unit product cost (a) = (b) 3.27 4 8.13 s The fixed portion of the manufacturing overhead cost is causing the unit product costs to fluctuate. The unit product cost decreases as the level of oduction decreases because the fixed overhead is spread over fewer units. The variable portion of the manufacturing overhead cost is causing the unit product costs to fluctuate. The unit product cost increases as the level of Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that duction decreases because the variable overhead is spread over fewer units. 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. The variable portion of the manufacturing overhead cost is causing the unit product costs to fluctuate. The unit product cost decreases as the level of roduction decreases because the variable overhead is spread over fewer units. Required: e estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? for the fourth 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead 4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates. rates, calculate the unit product cost for all units produced during the year. (Do not round the intermediate calculations and calculate the unit product cost for all units produced during the year. round the "Unit product cost" to 2 decimal places.) Unit product cost Required 1 Required 2 Required 3 Required 4 assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? Fixed manufacturing overhead cost Required 1 Required 2 Required 3 Required 4 Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? (Do not round the intermediate calculations and round the "Unit product cost" to 2 decimal places.) Unit product cost