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8 During the month of May, Jackson Inc. found that the direct labor cost totaled $15,000. If direct labor cost was 40% of prime cost and 60% of conversion cost then total manufacturing costs during May were: $62,500 $47,500 $25,000 $37,500 E. None of the above А. В. С. D.

8 During the month of May, Jackson Inc. found that the direct labor cost totaled $15,000. If direct labor cost was 40% of prime cost and 60% of conversion cost then total manufacturing costs during May were: $62,500 $47,500 $25,000 $37,500 E. None of the above А. В. С. D.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please I want to learn how to make these problems with a good explanation. One of  those there is the possible answer.

I need only question 8

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7 Augusta Inc. is a manufacturing company whose total factory overhead costs fluctuate somewhat from month to month. The manager of the company believes that the cost driver is the number of machine-hours used in its production facility. These costs for the last four months in 2020 are given below. Machine-hours Total factory overhead %$4 104,400 September October 6,500 10,000 8,500 2$ 130,000 $ 118,500 November 5,000 24 100,000 December The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 5,000 machine-hours level of activity as follows: $ 10,000 Indirect materials (variable) Rent (fixed) Maintenance (mixed) Total factory overhead costs 50,000 2$ 100,000 Assume that all data are within the relevant range, using the high-low method how much maintenance cost would you expect the company to incur at an operating level of 7200 machine-hours? (Round to the nearest dollars.) А. 24 58,800 B. 2$ 51,600 С. $ 73,200 D. $ 37,920 E. None of the above 8 During the month of May, Jackson Inc. found that the direct labor cost totaled $15,000. If direct labor cost was 40% of prime cost and 60% of conversion cost then total manufacturing costs during May were: $62,500 $47,500 $25,000 $37,500 А. B. С. D. E. None of the above
Transcribed Image Text:7 Augusta Inc. is a manufacturing company whose total factory overhead costs fluctuate somewhat from month to month. The manager of the company believes that the cost driver is the number of machine-hours used in its production facility. These costs for the last four months in 2020 are given below. Machine-hours Total factory overhead %$4 104,400 September October 6,500 10,000 8,500 2$ 130,000 $ 118,500 November 5,000 24 100,000 December The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 5,000 machine-hours level of activity as follows: $ 10,000 Indirect materials (variable) Rent (fixed) Maintenance (mixed) Total factory overhead costs 50,000 2$ 100,000 Assume that all data are within the relevant range, using the high-low method how much maintenance cost would you expect the company to incur at an operating level of 7200 machine-hours? (Round to the nearest dollars.) А. 24 58,800 B. 2$ 51,600 С. $ 73,200 D. $ 37,920 E. None of the above 8 During the month of May, Jackson Inc. found that the direct labor cost totaled $15,000. If direct labor cost was 40% of prime cost and 60% of conversion cost then total manufacturing costs during May were: $62,500 $47,500 $25,000 $37,500 А. B. С. D. E. None of the above
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