8. 150 4,200 5,475 4,760 4,325 3,975 9. 210 10 180 11 170 12 145

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Mema Company makes motorcycles. Management wants to estimate overhead
costs to plan its operations. A recent trade publication revealed that overhead costs tend to
vary with machine hours. To check this, they collected the following data for the past 12
months.

(See the picture for the table)

Compute for the:

Use the High-low method to estimate the fixed and variable portion of overhead costs based on machine hours.

Months
Machine Hours
Overhead Costs
P4,500
4225
1
175
2
170
160
4,321
5,250
4,800
5,100
4,450
4
190
5
175
200
7
160
8.
150
4,200
5,475
4,760
4,325
3,975
9.
210
10
180
11
170
12
145
Transcribed Image Text:Months Machine Hours Overhead Costs P4,500 4225 1 175 2 170 160 4,321 5,250 4,800 5,100 4,450 4 190 5 175 200 7 160 8. 150 4,200 5,475 4,760 4,325 3,975 9. 210 10 180 11 170 12 145
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