6 Splown Manufacturing produces surfboards The company uses a normal costing system and locaties 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. Sobel Wholesale, due to large fluctuations in price. The owner of Splawn 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: OHoverhead, mat. = materials, and Varvariable) Total cost Qtr 2 Qt3 Annual Requirement 3. Splown Manufacturing prices its surfboards at manufacturing cost plus 20%. Why might Sobel Wholesale be seeing large fluctuations in the prices of boards? Which of the methods described in requirements 1 and 2 would you recommend Splawn use? Explain Splawn should use the budgeted (5) on (6) Prices () manufacturing overhead rate because capacity decisions are based vary based on quarterly fluctuations in production. 1: Data Table Quarter Surfboards manufactured and sold 900 825 330 145 2. More info It takes 1 direct manufacturing labor-hour to make each board. The actual direct material cost is $8.00 per board. The actual direct manufacturing labor rate is $22 per hour. The budgeted variable manufacturing overhead rate is $15 per direct manufacturing labor-hour. Budgeted forced manufacturing overhead costs are $16.500 each quarter 3: Requirements 1. 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. Calculate the total manufacturing cost per unit for the second and third quarter assuming the company allocates manufacturing overhead costs based on an annual budgeted manufacturing overhead rate. Splawn Manufacturing prices its surfboards at manufacturing cost plus 20%. Why might Sobel Wholesale be seeing large fluctuations in the prices of boards? Which of the methods described in requirements 1 and 2 would you recommend Splawn use? Explain. 3. o Var. OH per unit (1) O Direct labor per unit Direct mat. per unit O Fixed overhead O Fixed OH per unit 0 Total direct labor Total direct materials O Variable overhead (2) O o Var. OH per unit O Direct labor per unit O Direct mat. per unit Fixed overhead O Fixed OH per unit 0 Total direct labor 0 Total direct materials Variable overhead Var. OH per unit (3) O Direct labor per unit O Direct mat. per unit O Fixed overhead O Fixed OH per unit 0 Total direct labor Total direct materials O Variable overhead Var. OH per unit O Fixed OH per unit 0 Total direct labor Total direct materials Variable overhead (5) O annual O quarterly O Direct labor per unit O Direct mat. per unit O Fixed overhead (6) O longer quarterly periods rather than annual periods. longer annual periods rather than quarterly periods. (7) O should O should not