Question: Rochester Heating Systems, Inc. calculates its predetermined overhead rate on a quarterly basis. The following estimates were made for the current year. The firms main

Rochester Heating Systems, Inc. calculates its predetermined overhead rate on a quarterly basis. The following estimates were made for the current year.

The firmâ€™s main product, part number SC71, requires $600 of direct material and 20 hours of direct labor per unit. The labor rate is $17 per hour.

Required:
1. Calculate the firmâ€™s quarterly predetermined overhead rate for each quarter.
2. Determine the cost of one unit of part number SC71 if it is manufactured in February versus May.
3. Suppose the companyâ€™s pricing policy calls for a 10 percent markup over cost. Calculate the price to be charged for a unit of part number SC71 if it is produced in February versus May.
4. Calculate the companyâ€™s predetermined overhead rate for the year if the rate is calculated annually.
5. Based on your answer to requirement (4), what is the cost of a unit of part number SC71 if it is manufactured in February? In May?
6. What is the price of a unit of part SC71 if the predetermined overhead rate is calculatedannually?

Estimated Estimated Direct-Labor Hours 50,000 32,000 25,000 28,000 Quarterly Predetermined Overhead Rate (per direct-labor hour) Manufacturing First quarter Second quarter Third quarter Fourth quarter Total Overhead S 400,000 320,000 200,000 280,000 $1,200,000 135,000

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