Exercise $2-13($Static$)$ Varying Plantwide Predetermined Overhead Rates $[$LO$2-1,$ LO$2-2,$ LO$2-3]$

Kingsport Container Company makes a single product with wide seasonal variations in demand. The company uses a job$-$order costing

system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the

allocation base. Its estimated costs, by quarter, for the coming year are given below:

Management finds the variation in quarterly unit product costs to be confusing. Accordingly, you have been asked to find a more

appropriate way of applying manufacturing overhead cost to units of product.

Required:

Assuming the estimated variable manufacturing overhead cost per unit is $$2\mathrm{.}00,$ what must be the estimated total fixed

manufacturing overhead cost per quarter?

Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for

the fourth quarter?

What is causing the estimated unit product cost to fluctuate from one quarter to the next?

Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates,

calculate the unit product cost for all units produced during the year.

Complete this question by entering your answers in the tabs below.

Assuming the estimated variable manufacturing overhead cost per unit is $$2\mathrm{.}00,$ what must be the estimated total fixed

manufacturing overhead cost per quarter?

Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product

cost for the fourth quarter?

Note: Do not round intermediate calculations and round your final answer to $2$ decimal places.

What is causing the estimated unit product cost to fluctuate from one quarter to the next?

The

Required $1$

Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead

rates, calculate the unit product cost for all units produced during the year.

Note: Do not round intermediate calculations and round your final answer to $2$ decimal places.