EXERCISE 3-12 (CONTINUED)

2. Using a predetermined overhead rate, the unit product costs would be:

Quarter

First Second Third Fourth

Direct materials ... $240,000 $120,000 $ 60,000 $180,000

Direct labor ... 128,000 64,000 32,000 96,000

Manufacturing overhead:

Applied at $4.80 per unit,

300% of direct labor

cost, or 160% of direct

materials cost ... 384,000 192,000 96,000 288,000

Total cost ... $752,000 $376,000 $188,000 $564,000

Number of units produced ... 80,000 40,000 20,000 60,000

Unit product cost ... $9.40 $9.40 $9.40 $9.40