The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs. Month January February March April May June Direct-Labor Hours 37,000 39,000 52,000 40,000 44,000 42,000 March's costs consisted of machine supplies ($296,400), depreciation ($32,500), and plant maintenance ($570,100). These costs exhibit the following respective behavior: variable, fixed, and semivariable. Manufacturing Overhead $701,000 740,000 899,000 754, 250 805,500 802,500 The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost, which is step- fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $77,500. The cost is $155,000 from 15,000- 29,999 hours and $232,500 when activity reaches 30,000 hours or more. Required: 4. 1. Determine the machine supplies cost and depreciation for January. 2. Using the high-low method, analyze Metcalf's plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. 3. Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 29,900 direct-labor hours are worked. Complete this question by entering your answers in the tabs below. Variable cost per hour Fixed cost per month * Answer is complete but not entirely correct. Required 1 Required 2 Required 3 Using the high-low method, analyze Metcalf's plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. (Round your "Variable cost per hour" answer to 2 decimal places.) S S 12.23 635,960 x
The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs. Month January February March April May June Direct-Labor Hours 37,000 39,000 52,000 40,000 44,000 42,000 March's costs consisted of machine supplies ($296,400), depreciation ($32,500), and plant maintenance ($570,100). These costs exhibit the following respective behavior: variable, fixed, and semivariable. Manufacturing Overhead $701,000 740,000 899,000 754, 250 805,500 802,500 The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost, which is step- fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $77,500. The cost is $155,000 from 15,000- 29,999 hours and $232,500 when activity reaches 30,000 hours or more. Required: 4. 1. Determine the machine supplies cost and depreciation for January. 2. Using the high-low method, analyze Metcalf's plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. 3. Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 29,900 direct-labor hours are worked. Complete this question by entering your answers in the tabs below. Variable cost per hour Fixed cost per month * Answer is complete but not entirely correct. Required 1 Required 2 Required 3 Using the high-low method, analyze Metcalf's plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. (Round your "Variable cost per hour" answer to 2 decimal places.) S S 12.23 635,960 x
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours
as its cost driver for overhead costs.
Month
January
February
March
April
May
June
Direct-Labor
Hours
37,000
39,000
52,000
40,000
44,000
42,000
March's costs consisted of machine supplies ($296,400), depreciation ($32,500), and plant maintenance ($570,100). These costs
exhibit the following respective behavior: variable, fixed, and semivariable.
Manufacturing
Overhead
$701,000
740,000
899,000
754, 250
805,500
802,500
The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost, which is step-
fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $77,500. The cost is $155,000 from 15,000-
29,999 hours and $232,500 when activity reaches 30,000 hours or more.
Required:
4.
1. Determine the machine supplies cost and depreciation for January.
2. Using the high-low method, analyze Metcalf's plant maintenance cost and calculate the monthly fixed portion and the variable cost
per direct-labor hour.
3. Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing
overhead the company can expect in November if 29,900 direct-labor hours are worked.
Complete this question by entering your answers in the tabs below.
Variable cost per hour
Fixed cost per month
* Answer is complete but not entirely correct.
Required 1 Required 2 Required 3
Using the high-low method, analyze Metcalf's plant maintenance cost and calculate the monthly fixed portion and the variable
cost per direct-labor hour. (Round your "Variable cost per hour" answer to 2 decimal places.)
S
S
12.23
635,960 x
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