Job Costing
Time Period Used to Compute Indirect Cost Rates
Capitola Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the companys 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, Pacific Wholesale, due to large fluctuations in price. The owner of Capitola 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:
			Quarter
			1	2	3	4
	Surfboards manufactured and sold		500	400	100	250	1250
Additonal information:
	Direct manufacturing labor hours		2	hours per board
	Actual direct material cost		$65	per board
	Actual direct manufacturing labor rate		$20	per hour
	Budgeted variable manufacturing overhead		$16	per direct manufacturing labor-hour
	Budgeted fixed manufacturing overhead		$20,000	per quarter			$80,000
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Requirements
1	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.
	a.	Check your spelling carefully and do not abbreviate.
2	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.
	a.	Check your spelling carefully and do not abbreviate.