Safari File Edit View History Bookmarks Window Help 6) 8gb 40% ID Sun 8:00 AM a @, E jump to pg o book contents g0 search ebook 4. What is the balance in the Overhead account at the end of the month? What is this balance called? EXERCISE 5-12 Varying Predetermined Overhead Rates [LO3, LO5) Jacarda Company makes a composting bin that is subject to wide seasonal variations in demand. Unit product 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 given below rd view Quarter First $240,000 96,000 228,000 Second $120,000 48,000 204,000 Third Fourth Direct materials Direct labour Manufacturing $60,000 24,000 192,000 $180,000 d yet.) 72,000 216,000 overhead $564,000 $372,000 $276,000 $46B,000 costs Number of units to be 80,000 40,000 20,000 60,000 Estimated unit product cost $ 7.05 S 9.30 S 13.80 $ 7.80 Management finds the variation in unit product 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. The company uses a job-order costing system. How would you recommend that manufacturing overhead cost be assigned to production? Be specific, and show computations 2. Recompute the company's unit product costs in accordance with your recommendations in (1) above. EXERCISE 5-13 Applying Overhead; Journal Entries; Disposition of Underapplied or Overapplied Overhead LO4