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: Direct materials Direct labour Manufacturing overhead Total manufacturing costs Number of units to be produced Estimated unit product cost Predetermined overhead rate-unit of product Predetermined overhead rate-basis on direct labour cost Management finds the variation in unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production. Estimated unit product cost First Second Third Fourth 554,400 $277,200 $138,600 $415,800 277, 200 138,600 69,300 207,900 365,400 340,200 327,600 352,800 $1,197,000 $756,000 $535,500 $976,500 84,000 42,000 21,000 63,000 14.25 $ 18.00 $25.50 $ 15.50 $ Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) First $ Second Quarter 2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to 2 decimal places.) Quarter Third per unit % Fourth

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Chapter1: Financial Statements And Business Decisions
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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:
Direct materials
Direct labour
Manufacturing overhead
Total manufacturing costs
Number of units to be produced
Estimated unit product cost
Management finds the variation in unit product costs to be confusing and difficult to work with. It has been suggested that the problem
lies with manufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate
way of assigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's
overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production.
Predetermined overhead rate-unit of product
Predetermined overhead rate-basis on direct labour cost
Required:
1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.)
Quarter
Second
First
Third
Fourth
$ 554,400 $277,200 $138,600 $415,800
277, 200
138,600 69,300 207,900
365,400 340,200 327,600 352,800
$1,197,000 $756,000 $535,500 $976,500
84,000 42,000 21,000 63,000
14.25 $ 18.00 $25.50 $ 15.50
Estimated unit product cost
$
First
2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to 2 decimal
places.)
Second
Quarter
per unit
%
Third
Fourth
Transcribed Image Text: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: Direct materials Direct labour Manufacturing overhead Total manufacturing costs Number of units to be produced Estimated unit product cost Management finds the variation in unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production. Predetermined overhead rate-unit of product Predetermined overhead rate-basis on direct labour cost Required: 1. Calculate the predetermined overhead rate based on units and direct labour? (Round your "per unit" answer to 2 decimal places.) Quarter Second First Third Fourth $ 554,400 $277,200 $138,600 $415,800 277, 200 138,600 69,300 207,900 365,400 340,200 327,600 352,800 $1,197,000 $756,000 $535,500 $976,500 84,000 42,000 21,000 63,000 14.25 $ 18.00 $25.50 $ 15.50 Estimated unit product cost $ First 2. Recompute the company's unit product costs in accordance with rate per unit in (1) above. (Round your answers to 2 decimal places.) Second Quarter per unit % Third Fourth
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