Kingsport Containers Company makes a single product with 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:

Management finds the variation in quarterly unit product costs to be confusing. Accordingly, you have been asked to find a more appropriate way of applying manufacturing overhead cost to units of product.

Required:

Assuming the estimated variable manufacturing overhead cost per unit is $$0\mathrm{.}40,$ what must be the estimated total fixed manufacturing overhead cost per quarter?

Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?

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 rates, calculate the unit product cost for all units produced during the year.

for the fourth quarter?

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 rates, calculate the unit product cost for all units produced during the year.

Complete this question by entering your answers in the tabs below.

Assuming the estimated variable manufacturing overhead cost per unit is $$0\mathrm{.}40,$ what must be the estimated total fixed manufacturing overhead cost per quarter?

Fixed manufacturing overhead cost

Required $1$

Required $3$

Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?

Note: Do not round intermediate calculations and round the "Unit product cost" to $2$ decimal places.

Unit product cost

What is causing the estimated unit product cost to fluctuate from one quarter to the next?

The portion of the manufacturing overhead cost is causing the estimated unit product cost to fluctuate. The unit product cost

as production

jecause the overhead is spread over fewer units.

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.

Note: Do not round intermediate calculations and round your final answer to $2$ decimal places.

Unit product cost