Thornton Manufacturing estimated its product costs and volume of production for Year 3 by quarter as follows.

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Direct raw materials	$ 87,500	$ 47,500	$ 127,500	$ 67,500
Direct labor	52,500	28,500	76,500	40,500
Manufacturing overhead	95,000	139,000	175,000	191,600
Total production costs	$ 235,000	$ 215,000	$ 379,000	$ 299,600
Expected units produced	17,500	9,500	25,500	13,500

Thornton Company sells a souvenir item at various resorts across the country. Its management uses the products estimated quarterly cost to determine the selling price of its product. The company expects a large variance in demand for the product between quarters due to its seasonal nature. The company does not expect overhead costs, which are predominately fixed, to vary significantly as to production volume or with amounts for previous years. Prices are established by using a cost-plus pricing strategy. The company finds variations in short-term unit cost confusing to use. Unit cost variations complicate pricing decisions and many other decisions for which cost is a consideration.

Required

a. Based on estimated total production cost, determine the expected quarterly cost per unit for Thorntons product.

b-1. Calculate the predetermined overhead rate.

b-2. Calculate the unit cost per quarter based on the predetermined overhead rate.

Based on estimated total production cost, determine the expected quarterly cost per unit for Thorntons product.

Note: Round your answers to 2 decimal places.

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Estimated cost		per unit		per unit		per unit		per unit

Calculate the predetermined overhead rate.

Note: Round your answer to 2 decimal places.

Predetermined overhead rate

per unit

Calculate the unit cost per quarter based on the predetermined overhead rate.

Note: Round your intermediate calculations and final answers to 2 decimal places.

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Cost per unit