Question

nts 160,000 80,000 40,000 120,000 02 Otto Tanufacturingtorenheadats S230,000 $386,000 s19,000 Total manufacturing costs (a) 590,000 $386,000 $284,000 120,000 60,000 30,000 90,000 (a) ? been asked to find a more appropriate way of assigning m overhead cost to units of product. ferencesmanufacturing about cost behavior from the first three quarters hold constant, what is the estimated unit product cost 3. What its calculate the unit product cost for all unitsp during the year. the K Prev 16 of 18 Next>

Answer 1

1)

Estimated fixed overhead cost =Total manufacturing overhead for first quarter - Total estimated variable overhead

= 230000-[120000*.40]

= 230000 - 48000

= 182000

**you can check for any other quarter ,it will comes out to be same

2)Manufacturing overhead for fourth quarter =182000+ [90000*.40]

= 182000+ 36000

= 218000

Total manufacturing cost = Direct material +Labor + overhead

= 150000+120000+218000

= 488000

Unit cost = 488000/90000 = $ 5.42 per unit

3)The number of units produced every quarter causing the unit cost to change every quarter

4)Total manufacturing overhead for the year =230000+206000+194000+218000=848000

Total units to be produced =120000+60000+30000+90000=300000

Overhead cost per unit = 848000/300000 = $ 2.83 per unit

First quarter:(can check for other quarter ,it is same)

Material cost (since variable remain constant in per unit)=200000/120000=1.67 per unit

Labor cost (since variable remain constant in per unit) =160000/1200000=1.33 per unit

Unit cost = 1.67+1.33+2.83 = 5.83 per unit