Balcom Enterprises is planning to introduce a new product that will sell for $110 a unit. Manufacturing cost estimates for 27.000 units for the first year of production are: • Direct materials $1.269.000. • Direct labor $528.000 (based on $16 per hour 33.000 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: Factory overhead costs Direct labor hours $134,000 Dependent variable Independent variable Intercept Coefficient on independent variable Coefficient of correlation R² $ 6.00 0.953 0.842 Based on this information, what is the total overhead cost for an estimated activity level of 43.000 direct labor-hours?

Balcom Enterprises is planning to introduce a new product that will sell for $110 a unit. Manufacturing cost estimates for 27.000 units for the first year of production are: • Direct materials $1.269.000. • Direct labor $528.000 (based on $16 per hour 33.000 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: Factory overhead costs Direct labor hours $134,000 Dependent variable Independent variable Intercept Coefficient on independent variable Coefficient of correlation R² $ 6.00 0.953 0.842 Based on this information, what is the total overhead cost for an estimated activity level of 43.000 direct labor-hours?

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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