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Category > Accounting Posted 20 Dec 2017 My Price 10.00

quarter’s production in units.

Exercise 5-12 Varying Predetermined Overhead Rates 

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:

 

  Quarter
 
  First Second Third Fourth
  Direct materials $ 554,400   $ 277,200   $ 138,600   $ 415,800  
  Direct labour   277,200     138,600     69,300     207,900  
  Manufacturing overhead   365,400     340,200     327,600     352,800  
  Total manufacturing costs $ 1,197,000   $ 756,000   $ 535,500   $ 976,500  
  Number of units to be produced   84,000     42,000     21,000     63,000  
  Estimated unit product cost $ 14.25   $ 18.00   $ 25.50   $ 15.50  

 

1.

Calculate the predetermined overhead rate based on units and direct labour? 

2.

Recompute the company’s unit product costs in accordance with your recommendations in (1) above.

 

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Status NEW Posted 20 Dec 2017 04:12 PM My Price 10.00

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