ABC Company's total overhead costs at various levels of activity are presented below: Machine hours Total overhead costs March 60,000 $216,800 April 50,000 194, 000 May 70, 000 239,600 June 80,000 262,400 Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance. At the 50,000 - machine-hour level of activity, these costs are presented below: Utilities (V) $54,000 Supervisory salaries (F) 62,000 Maintenance (M) 78,000 Total overhead costs $194,000 V Variable, F = Fixed, M = Mixed The company wants to break down the maintenance cost into its basic variable and fixed cost elements. Required: a) Estimate the maintenance cost for June. b) Use the high-low method to estimate the cost formula for maintenance cost. c) Estimate the total overhead cost at an activity level of 55,000 machine hours, using the separate estimates you obtained for its components. d) Estimate the total overhead cost at an activity level of 55,000 machine hours,

ABC Company's total overhead costs at various levels of activity are presented below: Machine hours Total overhead costs March 60,000 $216,800 April 50,000 194, 000 May 70, 000 239,600 June 80,000 262,400 Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance. At the 50,000 - machine-hour level of activity, these costs are presented below: Utilities (V) $54,000 Supervisory salaries (F) 62,000 Maintenance (M) 78,000 Total overhead costs $194,000 V Variable, F = Fixed, M = Mixed The company wants to break down the maintenance cost into its basic variable and fixed cost elements. Required: a) Estimate the maintenance cost for June. b) Use the high-low method to estimate the cost formula for maintenance cost. c) Estimate the total overhead cost at an activity level of 55,000 machine hours, using the separate estimates you obtained for its components. d) Estimate the total overhead cost at an activity level of 55,000 machine hours,

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Description: ABC Company's total overhead costs at various levels of activity are presented below: Machine hours Total overhead costs March 60,000 $216,800 April 50, 000 194, 000 May 70, 000 239, 600 June80,000 262,400 Assume that the overhead costs above consis

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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