Spaine 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, Solar Wholesale, due to large fluctuations in price. The owner of Spaine 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: (Click the icon to view the budgeted information.) (Click the icon to view additional information.) Read the requirements. X i Data Table and sales occur in the first and he second and third quarters. Spaine Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing of the year. The company is in danger of losing one of its larger customers, Solar Wholesale, due to large fluctuations i provided the following budgeted information for the coming year (Click the icon to view the budgeted information.) (Click the icon to view additional information.) Read the requirements. - A X Quarter 2 3 540 270 1 810 Requirements 4 180 ad rate determined for each a Surfboards manufactured and sold verhead rate determined for e Print Done i More Info 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. Spaine Manufacturing prices its surfboards at manufacturing cost plus 20%. Why might Solar Wholesale be seeing large fluctuations in the prices of boards? Which of the methods described in requirements 1 and 2 would you recommend Spaine use? Explain. It takes 1 direct manufacturing labor-hour to make each board. The actual direct material cost is $8.00 per board. The actual direct manufacturing labor rate is $20 per hour. The budgeted variable manufacturing overhead rate is $13 per direct manufacturing labor-hour. Budgeted fixed manufacturing overhead costs are $13,500 each quarter. Print Done Print Done Choose from any list or enter any number in the input fields and then click Check Answer. 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 + Direct mat. per unit Var. OH per unit + Fixed OH per unit + = + + + 11 Qtr 2 Qtr 3 Annual Direct labor per unit $ $ $ + + + 11 + + + 11 Requirement 3. Splunge Manufacturing prices its surfboards at manufacturing cost plus 20%. Why might Sode Wholesale be seeing large fluctuations in the prices of boards? Which of the methods described in requirements 1 and 2 would you recommend Splunge use? Explain. Splunge should use the budgeted annual manufacturing overhead rate because capacity decisions are based on longer annual periods rather than quarterly periods. Prices should not vary based on quarterly fluctuations in production
