javadi company makes a single product that is subject to wide seasonal variations i 384991

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: Quarter First Second Third Fourth Direct materials $ 160,000 $ 80,000 $ 40,000 $ 120,000 Direct labor 80,000 40,000 20,000 60,000 Manufacturing overhead 240,000 216,000 204,000 ? Total manufacturing costs (a) 480,000 $ 336,000 264,000 $ ? Number of units to be produced (b) 160,000 80,000 40,000 120,000 Estimated unit product cost (a Af· b) $ 3.00 $ 4.20 $ 6.60 $ ? 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 a. Using the high low method, estimate the fixed manufacturing overhead cost per quarter and the variable manufacturing overhead cost per unit. Fixed manufacturing overhead cost $______ per quarter Variable manufacturing overhead $ ______ per unit 1 b. Compute the total manufacturing overhead cost, total manufacturing cost and unit product cost for the fourth quarter. Total manufacturing overhead cost $ _______ Total manufacturing cost $_______ Unit product cost $ _________