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Javadi Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes predetermined
Javadi Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes 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 | ||||||||
| First | Second | Third | Fourth | |||||
| Direct materials | $ | 240,000 | $ | 120,000 | $ | 60,000 | $ | 180,000 |
| Direct labor | 80,000 | 40,000 | 20,000 | 60,000 | ||||
| Manufacturing overhead | 230,000 | 206,000 | 194,000 | ? | ||||
| Total manufacturing costs (a) | $ | 550,000 | $ | 366,000 | $ | 274,000 | $ | ? |
| Number of units to be produced (b) | 120,000 | 60,000 | 30,000 | 90,000 | ||||
| Estimated unit product cost (a | ||||||||
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