Kingsport Containers Company makes a single product with wide seasonal variations in demand. The company uses...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Kingsport Containers 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: Quarter Second $ 100,000 80,000 206,000 Third Required 1 Required 2 Required 3 Required 4 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 the "Unit product cost" to 2 decimal places. Unit product cost Complete this question by entering your answers in the tabs below. Direct materials Direct labor Manufacturing overhead Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) (b) First $ 200,000 160,000 230,000 $590,000 120,000 $ 4.92 $ 386,000 60,000 $ 6.43 $ 50,000 40,000 194,000 $ 284,000 30,000 $ 9.47 Fourth $ 150,000 120,000 ? $ ? 90,000 $ ? 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: 1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? 4. 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. Required 1 Required 2 Required 3 Required 4 What is causing the estimated unit product cost to fluctuate from one quarter to the next? The as production portion of the manufacturing overhead cost causing the estimated unit product cost to fluctuate. The unit product cost because the overhead is spread over fewer units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 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. Unit product cost Required 1 Required 2 Required 3 Required 4 Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? Fixed manufacturing overhead cost Kingsport Containers 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: Quarter Second $ 100,000 80,000 206,000 Third Required 1 Required 2 Required 3 Required 4 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 the "Unit product cost" to 2 decimal places. Unit product cost Complete this question by entering your answers in the tabs below. Direct materials Direct labor Manufacturing overhead Total manufacturing costs (a) Number of units to be produced (b) Estimated unit product cost (a) (b) First $ 200,000 160,000 230,000 $590,000 120,000 $ 4.92 $ 386,000 60,000 $ 6.43 $ 50,000 40,000 194,000 $ 284,000 30,000 $ 9.47 Fourth $ 150,000 120,000 ? $ ? 90,000 $ ? 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: 1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? 4. 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. Required 1 Required 2 Required 3 Required 4 What is causing the estimated unit product cost to fluctuate from one quarter to the next? The as production portion of the manufacturing overhead cost causing the estimated unit product cost to fluctuate. The unit product cost because the overhead is spread over fewer units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 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. Unit product cost Required 1 Required 2 Required 3 Required 4 Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? Fixed manufacturing overhead cost
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Kingsport Containers 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...
-
Terri is single and age 32. She reported AGI of $70,000 in tax year 2021. She is an active participant in her employers pension plan. What is the maximum deductible IRA contribution she can make for...
-
What is the purpose of risk management industry standards?
-
What can be inferred about the evolution of the cranium and the vertebral column from examining hagfishes and lampreys?
-
Piecewise Linear Regression. In Example 7.3 we showed how a linear regression model with a change in slope at some point $t\left(x_{\min } Example 7.3 An important special case of practical interest...
-
Montel Companys July sales budget calls for sales of $600,000. The store expects to begin July with $50,000 of inventory and to end the month with $40,000 of inventory. Gross margin is typically 40%...
-
Write a Brute force algorithm to find all the common elements in two lists of integer numbers. (e.g., the output for the lists [1, 3, 4, 7] and [1, 2, 3, 4, 5, 6] should be 1, 3, 4). Show the time...
-
What can organizations do to ensure that their strategies and decisions align with their values? How would you demonstrate this to employees
-
In an argumentative essay of approximately 1,200 to 1,500 words, discuss the possible effects of raising the minimum wage to $15.00 per hour. What is the main question that Nanette should answer in...
-
Developed Countries have steadily become the largest consumers of resources and at the same time have been wasting more resources than they actually need. This has led to an imbalance of resource...
-
What is Economic Development? What is the draft Economic Development Plan? What are the benefits of an Economic Development Plan? How was the draft Economic Development Plan developed? How will the...
-
Q1: If you were to compare Indian and Chinese institutions, what conclusions would you reach about the economic future of the two countries? How do they differ from the developed countries we have...
-
Discuss the costs and benefits, or the political economics, of capitalism on human lives and the environment. Incorporate what was learned in the relevant chapters, such as Risks and Hazards, The...
-
Does this assumption apply today? Whether you agree or disagree, you will need to explain why and provide examples to support your stance. Assumption: Managers Need Only to Understand How to Use an...
-
If a process has a six-sigma capability, what is the process capability index? a. 1 b. 2 c. 6 d. 12
-
By using the yield to maturity on AT&Ts debt, we found that its pretax cost of debt is 3.65%. If AT&Ts tax rate is 25%, what is its effective cost of debt?
-
You work in Walt Disney Companys corporate finance and treasury department and have been assigned to the team estimating Disneys WACC. You must estimate this WACC in preparation for a team meeting...
-
You are working for Microsoft evaluating the possibility of selling energy drinks. Microsofts WACC is 8.1%. Energy drinks would be a new line of business for Microsoft, however, so the systematic...
Study smarter with the SolutionInn App