At the high level of activity in December, 9,500 machine hours were run, and power costs were $19,200. In June, a month of low activity, 4,200 machine hours were run, and power costs amounted to $9,100. Using the high-low method, calculate the estimated total power cost if 7,000 machine hours are run in a given month.

At the high level of activity in December, 9,500 machine hours were run, and power costs were $19,200. In June, a month of low activity, 4,200 machine hours were run, and power costs amounted to $9,100. Using the high-low method, calculate the estimated total power cost if 7,000 machine hours are run in a given month.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...

See similar textbooks

Similar questions

Gribble Company's high and low level of activity last year was 60,000 units of product produced in May and 20,000 units produced in November. Machine maintenance costs were $156,000 in May and $60,000 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 45, 000 units.
Sheridan Company's high and low level activity last year was 56000 units of product produced in May and 18000 units produced in November. Machine maintenance cost were $162,600 in May and $63,800 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 35000 units.
Determine an estimate of total maintenance Cost
The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor Costs Busiest month (June) 17,500 $ 229,022 Slowest month (December) 10,200 $ 155,000 If Macon expects to use 13,500 machine hours next month, what are the estimated direct labor costs?
Granger Corporation's High and low levels of activity
The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Busiest month (June) Slowest (December) Machine Direct Labor Hours Costs 14,750 $770,000 month 9,750 $620,000 If Shapely expects to use 12,000 machine hours next month, what are the estimated direct labor costs? A) $687,500 B) $1,008,260 C) $510,000 D) $400,969.
Pluto Company sold 2,000 units in October at a price of $35 per unit. The variable cost is $20 per unit. The monthly fixed costs are $10,000. Calculate the total contribution margin. What is the operating income earned in October?
Williams Company has variable costs of $0.60 per unit of product. In August, the volume of production was 24,000 units and units sold were 20,000. The total production costs incurred were $31,900. What are the fixed costs per month?
Your hotel served 32,500 guests with a $31,000 labor cost (the highest) in June and 20,000 guests with a $24,000 cost (the lowest) in December. Using the High-Low method, calculate the total variable cost in June.
Balcom Enterprises is planning to introduce a new product that will sell for $120 per unit. Manufacturing cost estimates for 28,000 units for the first year of production are: Direct materials $1,372,000. Direct labor $630,000 (based on $18 per hour × 35,000 hours). Although overhead has not be estimated for the new product, monthly data for Balcom's total production for the last two years has been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Factory overhead costs Independent variable Direct labor hours Intercept $ 136,000 Coefficient on independent variable $ 5.00 Coefficient of correlation 0.959 R2 0.846 Based on this information, what percentage of the variation in overhead costs is explained by the independent variable?
Need answer
Eckhart Corp. reports that at an activity level of 5,800 machine-hours in a month, its total variable inspection cost is $348,240 and its total fixed inspection cost is $128,500. What would be the total variable inspection cost at an activity level of 6,100 machine-hours in a month? Assume that this level of activity is within the relevant range. Solve this