Monte Company produces ski boots. At the beginning of the year, the cost manager estimated that...

 

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Monte Company produces ski boots. At the beginning of the year, the cost manager estimated that overhead costs would be $11,640,000 and that the units produced would be 1,200,000. Actual data concerning production for the past year follow: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Units produced 400,000 160,000 80,000 560,000 1,200,000 Prime costs $8,000,000 $3,200,000 $1,600,000 $11,200,000 $24,000,000 Overhead costs $3,200,000 $2,400,000 $3,600,000 $2,800,000 $12,000,000 Required 1. Calculate the unit cost for each quarter and for the year using the following costs: a. Actual prime costs b. Actual overhead costs c. Actual total manufacturing costs 2. What do the calculations in Requirement 1 tell you about actual costing? 3. Using supporting calculations, describe how normal costing would work. Monte Company produces ski boots. At the beginning of the year, the cost manager estimated that overhead costs would be $11,640,000 and that the units produced would be 1,200,000. Actual data concerning production for the past year follow: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Units produced 400,000 160,000 80,000 560,000 1,200,000 Prime costs $8,000,000 $3,200,000 $1,600,000 $11,200,000 $24,000,000 Overhead costs $3,200,000 $2,400,000 $3,600,000 $2,800,000 $12,000,000 Required 1. Calculate the unit cost for each quarter and for the year using the following costs: a. Actual prime costs b. Actual overhead costs c. Actual total manufacturing costs 2. What do the calculations in Requirement 1 tell you about actual costing? 3. Using supporting calculations, describe how normal costing would work.

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1 Calculation of unit cost Quarter 2 Quarter 1 8000000 3200000 1600000 11200000 24000000 a 3200000 2... View the full answer