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

  How much of the profit after tax was retained

Calculate the number of skirts that Beads4us must make in order to break even each month - Calculate the selling price per unit that will enable Beads

  Describe the fall of the communist bloc in eastern europe

Describe the fall of the communist bloc in Eastern Europe and especially in the Soviet Union. What developments of the 1980s contributed to this fall and how?

  Define your marketing strategy

Define your overall marketing strategy (B2B, B2C).List three ideas that make your product REMARKABLE in the international marketplace.Create three Headlines for your product - make sure they work in the target international market.

  Estimate the effect on sales revenue

Estimate the effect on sales revenue resulting from the planned change in fee structure for the next financial year, which starts 1 October and ends on 30 September. State any assumptions that you need to make.

  What would be the maximum purchase price acceptable

What qualitative factors (that is, issues with vendors, customers, or within the product itself) should the Ski Pro Corporation consider in determining whether they should make or buy the bindings?

  Ashland corporation, a merchandising firm

Ashland Corporation, a merchandising firm, is preparing its cash budget for October. The following information is available concerning its inventories:

  Concerns with segment reporting

Do you think that companies are worried about disclosing too much information if it comes to segment reporting? What's wrong with the reporting too much information? What do you think their main concerns include?

  How the authors characterize the traditional view

Describe how the authors characterize the traditional view of direct & indirect costs and what are your observations about this paper by Gordon and Loeb?

  Analyze how the sarbanes-oxley framework can prevent busines

Analyze how the Sarbanes-Oxley framework can prevent business model fraud in financial accounting and managerial accounting. Contrast the differences in the framework for financial accounting and managerial accounting.

  Identify each expense as fixed-variable,or mixed

Identify each expense as fixed, variable, or mixed and prepare a contribution margin income statement based on a volume of 5,000 windows.

  Explain the nature of balancing item foreign exchange gain

Translate the profit of FC45 000 and the statement of financial position into Australian dollars. Explain the nature of the balancing item foreign exchange gain.

  National bank has several departments that occupy

National Bank has several departments that occupy both floors of a two story building.

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