What is causing the estimated unit product cost

Assignment Help Managerial Accounting
Reference no: EM13965443

Javadi Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes 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:

652_260-B-M-A-J-O-C (940).png

Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.

Required:

1. Using the high-low method, estimate the fixed manufacturing overhead cost per quarter and the variable manufacturing overhead cost per unit. Create a cost formula to estimate the total manufacturing overhead cost for the fourth quarter. Compute the total manufacturing cost and unit product cost for the fourth quarter.

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

3. How would you recommend stabilizing the company's unit product cost? Support your answer with computations that adapt the cost formula you created in requirement 1.

Reference no: EM13965443

Questions Cloud

Write a research essay about shallow-web : Write a research essay about "SHALLOW-WEB". determine the primary point(s) of contention, and present a comparative analysis of the various viewpoints in 3-4 pages.
Describe the essential points of callahan''s argument : Callahan makes a convincing argument for controlling the increasing cost of providing life-extending interventions to the elderly. In narrative form, present and describe the essential points of Callahan's argument and his assumptions.
Jackknife point estimate of the population : (a) Find a jackknife point estimate of the population mean μ ozone level. (b) Construct a 95% jackknife con?dence interval for the population mean μ. (c) Compare the con?dence interval obtained in part (b).
Calculate the average heat transfer coefficient : Calculate the average heat transfer coefficient if the tube wall is maintained at a temperature of 200oC and it is 2 m long.
What is causing the estimated unit product cost : What is causing the estimated unit product cost to fluctuate from one quarter to the next?
Heat transfer coefficient between air and the inner tube : Estimate the heat transfer coefficient between air and the inner tube - The air enters at 16oC and leaves at 32oC. Its flow rate is 30 m/s.
What is the dea doing to slow down production of street meth : What is the main ingredient in street meth? Where is "ingredient" it made? What is the DEA doing to slow down production of street meth?
Consider the relationship between age & socioeconomic status : Consider the relationship between age and race. List and describe at least two (2) of the demographic trends and health characteristics of the elderly based on racial differences. What are the implications for the future health care for the elderl..
Parameter exponential population with density : Let X1,..., Xn be a random sample from a two-parameter exponential population with density 1 f (x, θ, υ) = θ e-(x-υ) θ , for x ≥ υ, θ > 0. Find MLEs for θ and υ when both are unknown.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd