Kingsport Containers, Ltd. of the Bahamas experiences wide variation in demand for the 200-litre steel drums it fabricates. The leakproof, rustproof steel drums have a variety of uses, from storing liquids and bulk materials to serving as makeshift musical instruments. The drums are made to order and are painted according to the customer's specificationsoften in bright patterns and designs. The company is well known for the artwork that appears on its drums. Unit costs are computed on a quarterly basis by dividing each quarter's manufacturing costs (materials, labour, and overhead) by the quarter's production in units. The company's estimated costs, by quarter, for the coming year are as follows: Quarter Direct materials Direct labour Manufacturing overhead First $ 260,000 200,000 320,000 Second $ 130,000 100.000 240,000 Third $ 65,000 50,000 190,000 Fourth $ 195,000 150,000 290,000 Total manufacturing costs $ 780,000 $470,000 $ 305,000 $635,000 Number of units to be produced Estimated cost per unit $ 80.000 9.75 $ 40,000 11.75 $ 20.000 15.25 $ 60.000 10.58 Management finds the variation in unit costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production. Required: 1. What would be the predetermined manufacturing overhead rate for the year on the basis of total units to be produced? (Round your answer to 2 decimal places.) Predetermined overhead rate per unit 2. Recompute the company's unit costs in accordance with your recommendations in part (1). (Round "Unit product cost" to 2 decimal places.) Quarter First Second Third Fourth Direct materials Direct labour Manufacturing overhead Total cost Number of units produced Unit product cost $ 0 $ 0 $ 0 $