Question
Spaid 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 company's
Spaid 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 company's 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,Solan Wholesale, due to large fluctuations in price. The owner of Spaid 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:
Spaid 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 company's 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, Solan Wholesale, due to large fluctuations in price. The owner of Spaid 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: EB (Click the icon to view the budgeted information) Read the requirements. (Click the icon to view additional information) (Click the icon to view additional information.) Requirement 1 and 2. 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 and an annual budgeted manufacturing overhead rate. First identify the formula to calculate the total manufacturing cost per unit, then enter the appropriate amounts to calculate the total cost per unit for second and third quarter based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate for the year. (Abbreviation used: OH overhead, mat materials, and Var. variable.) Total cost per unit Qtr 2 Qtr 3 Annual 1 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. 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. Spaid Manufacturing prices its surfboards at manufacturing cost plus 20%. Why might Solan Wholesale be seeing large fluctuations in the prices of boards? Which of the methods described in requirements 1 and 2 would you recommend Spaid use? Explain. 2. i Data Table Quarter 2 3 4. Surfboards manufactured and sold 925 625 250 200 Print Done More Info It takes 1 direct manufacturing labor-hour to make each board. The actual direct material cost is $11.00 per board. The actual direct manufacturing labor rate is $19 per hour. The budgeted variable manufacturing overhead rate is $18 per direct manufacturing labor-hour. Budgeted fixed manufacturing overhead costs are $12,500 each quarter. Print Done Spaid 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 company's 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, Solan Wholesale, due to large fluctuations in price. The owner of Spaid 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: EB (Click the icon to view the budgeted information) Read the requirements. (Click the icon to view additional information) (Click the icon to view additional information.) Requirement 1 and 2. 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 and an annual budgeted manufacturing overhead rate. First identify the formula to calculate the total manufacturing cost per unit, then enter the appropriate amounts to calculate the total cost per unit for second and third quarter based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate for the year. (Abbreviation used: OH overhead, mat materials, and Var. variable.) Total cost per unit Qtr 2 Qtr 3 Annual 1 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. 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. Spaid Manufacturing prices its surfboards at manufacturing cost plus 20%. Why might Solan Wholesale be seeing large fluctuations in the prices of boards? Which of the methods described in requirements 1 and 2 would you recommend Spaid use? Explain. 2. i Data Table Quarter 2 3 4. Surfboards manufactured and sold 925 625 250 200 Print Done More Info It takes 1 direct manufacturing labor-hour to make each board. The actual direct material cost is $11.00 per board. The actual direct manufacturing labor rate is $19 per hour. The budgeted variable manufacturing overhead rate is $18 per direct manufacturing labor-hour. Budgeted fixed manufacturing overhead costs are $12,500 each quarter. Print DoneStep by Step Solution
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