What is the company's fixed cost on these general accounting question? A manufacturing company has the following data for the firstquarter of its year:Month Machine Hours Utility Expense ($)April 3,000May 3,8001,5001,9001,250June 2,500Using the high-low method, what is the company's fixed cost?

Step 1: Define High-Low MethodThe High-Low Method is a simple technique used in cost estimation to…

Answered: A manufacturing company has the…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Benson Corporation estimated its overhead costs would be $22,500 per month except for January when it pays the $153,120 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $175,620 ($153,120 + $22,500). The company expected to use 7,900 direct labor hours per month except during July, August, and September when the company expected 9,100 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,950 units of product in each month except July, August, and September, in which it produced 4,550 units each month. Direct labor costs were $24.70 per unit, and direct materials costs were $10.00 per unit. Required a. Calculate a predetermined overhead rate based on direct labor hours. b. Determine the total allocated overhead cost for January, March, and August. c. Determine…
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A manufacturing company has the following data for the first quarter of its year: Month Machine Hours Utility Expense ($) April 3,000 May 3,800 1,500 1,900 1,250 June 2,500 Using the high-low method, what is the company's fixed cost?