Splunge 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 Splunge 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: E (Click the icon to view the budgeted information.) A (Click the icon to view additional information.) Data Table Read the reguirements. ead rate determined for each quarter and an Requirements Quarter verhead rate determined for each quarter and an cu 3 4 250 Surfboards manufactured and sold 925 625 200 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. Print Done 2. 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. 3. Splunge 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 Splunge use? Explain. More Info Print Done 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. Choose from any list or enter any number in the input fields and then click Check Answer. Print Done part remaining 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 Var. OH per unit Direct labor per unit Direct mat. per unit Fixed OH per unit per unit Qtr 2 %3D Qtr 3 %3D Annual 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. 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. Splunge should use the budgeted annual Splunge 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 Splunge 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: E (Click the icon to view the budgeted information.) A (Click the icon to view additional information.) Data Table Read the reguirements. ead rate determined for each quarter and an Requirements Quarter verhead rate determined for each quarter and an cu 3 4 250 Surfboards manufactured and sold 925 625 200 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. Print Done 2. 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. 3. Splunge 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 Splunge use? Explain. More Info Print Done 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. Choose from any list or enter any number in the input fields and then click Check Answer. Print Done part remaining 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 Var. OH per unit Direct labor per unit Direct mat. per unit Fixed OH per unit per unit Qtr 2 %3D Qtr 3 %3D Annual 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. 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. Splunge should use the budgeted annual
