Kingsport Containers Company makes a single product that issubject to wide seasonal variations in demand. The company uses ajob-order costing system and computes predetermined overhead rateson a quarterly basis using the number of units to be produced asthe allocation base. Its estimated costs, by quarter, for thecoming year are given below:

   

	Quarter
	First		Second		Third		Fourth
Direct materials	$	240,000	$	120,000	$	60,000	$	180,000
Direct labor		120,000		60,000		30,000		90,000
Manufacturing overhead		240,000		216,000		204,000		?
Total manufacturing costs (a)	$	600,000	$	396,000	$	294,000	$	?
Number of units to be produced (b)		160,000		80,000		40,000		120,000
Estimated unit product cost (a ÷ b)	$	3.75	$	4.95	$	7.35	$	?

   

Management finds the variation in quarterly unit product coststo be confusing and difficult to work with. It has been suggestedthat the problem lies with manufacturing overhead because it is thelargest element of total manufacturing cost. Accordingly, you havebeen asked to find a more appropriate way of assigningmanufacturing overhead cost to units of product.

   

Required:
1-a.	Using the high-low method, estimate the fixed manufacturingoverhead cost per quarter and the variable manufacturing overheadcost per unit. (Round the "Variable manufacturing overheadper unit" to 2 decimal places.)

          

1-b.	Compute the total manufacturing cost and unit product cost forthe fourth quarter. (Round the "Unit product cost" to 2decimal places.)

       

3.	Estimate the total manufacturing overhead cost for the year andan annual predetermined overhead rate. (Round the"Predetermined overhead rate" to 2 decimal places.)