Kingsport Containers Company makes a single product that is subject to wide seasonal varlations 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. Direct materials Direct labor Manufacturing over head Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) = (b) Quarter First Second Third Fourth $ 280, eee $140, eee $ 78.cee $212.dee 80, eee 48,060 28. eee 66.36 249.686 216. eee 284, eee 2 $ 600.000 $396.668 $ 294, e6e 2 128, 666 66, 68e 38,66e ge de 5.60 $ 6.60 $ 9.80 $ 2 Management finds the variation In quarterly unit product costs to be confusing and difficult to work with. It has been suggested that 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 Required: 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 one first three quarters hold constant, what is ne estimated unit product cost for the fourth cusrer? 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? 4. Assuming the company computes one predetermined overnead rate for the year rather than computing quarterly overhead rates. calculate the unit product cost for all units produced during the year