Reference no: EM132524342

Direct materials                                   $280,000                  $140,000            $70,000               $210,000

Direct labor                                         120,000                       60,000             30,000                  90,000

Manufacturing overhead                         220,000                       196,000           184,000                    ?

Total manufacturing costs (a)                  $620,000                     $396,000                $284,000            $?

Number of units to be produced (b)              120,000                    60,000                  30,000              90,000

Estimated unit product cost (a) ÷ (b)              $5.17                    $6.60                      $9.47                      $?

Question 1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter?

Question 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?

Question 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?

Question 4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.