A) For the manufacturing i) business, you are required to: Using the high-low method, estimate a cost formula for the maintenance cost Predict the total factory overheads cost for October, November, and December at 80,000, 100,000 and 120,000 activity levels respectively.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![These costs profile for the quarter ending 30 September is presented
below:
Machine-hours
Total factory
overhead costs
July
20,000
$6,750,000
Level of Activity
August
40,000
$9,610,000
The factory overhead costs above consist of indirect materials, rent,
and maintenance. The company has analyzed these costs at the
20,000 machine-hours level of activity as follows:
Indirect materials ($100/machine-hour)
Rent (fixed)..
Maintenance (mixed).
September
60,000
$12,470,000
ii)
.$3,000,000
$1,750,000
For planning purpose, the company wants to analyze the
maintenance cost into its variable and fixed cost elements.
A) For the manufacturing business, you are required to:
i)
Using the high-low method, estimate a cost formula for the
maintenance cost
Predict the total factory overheads cost for October,
November, and December at 80,000, 100,000 and 120,000
activity levels respectively.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb59d7882-5e1a-4e96-8617-c38e97c9150c%2F158449d1-d2e2-4397-95ea-f2a46ad7a191%2Fqh52tve_processed.jpeg&w=3840&q=75)
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