CanCo Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the following information has been extracted: Number of units produced Cost of goods manufactured Work-in-process inventory, beginning Work-in-process inventory, ending Direct materials cost per unit Direct labour cost per unit Manufacturing overhead cost, total Level of Activity March Manufacturing overhead cost 5,200 $260,800 31,000 53,000 9 11 ? July 9,400 The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month. X Cost of goods manufactured $399,000 23,000 16,000 Required: 1. For both March and June, determine the amount of manufacturing overhead cost added to production. (Hint: A useful way to proceed might be to construct a schedule of cost of goods manufactured.) 9 11 ? Answer is complete but not entirely correct. March 282,800 $ 2. By means of the high-low method of cost analysis, estimate a cost formula for manufacturing overhead. Express the variable portion of the formula in terms of a variable rate per unit of product. July 392,000 X 3. Assume that CanCo produced 8,200 units in September. What will be the cost of goods manufactured? (Assume that beginning and ending work-in-process Inventories were $18,100 and $10,100 respectively.)

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CanCo Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the
following Information has been extracted:
Number of units produced
Cost of goods manufactured
Work-in-process inventory, beginning
Work-in-process inventory, ending
Direct materials cost per unit
Direct labour cost per unit
Manufacturing overhead cost, total
Manufacturing overhead cost
Y=
Level of Activity
March
The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning,
management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per
month.
$
5,200
$260,800
31,000
53,000
Required:
1. For both March and June, determine the amount of manufacturing overhead cost added to production. (Hint: A useful way to
proceed might be to construct a schedule of cost of goods manufactured.)
Cost of goods manufactured
Answer is complete but not entirely correct.
July
March
X
9
11
?
July
9,400
$399,000
23,000
16,000
282,800 s
9
11
?
2. By means of the high-low method of cost analysis, estimate a cost formula for manufacturing overhead. Express the variable portion
of the formula in terms of a variable rate per unit of product.
392,000
3. Assume that CanCo produced 8,200 units in September. What will be the cost of goods manufactured? (Assume that beginning and
ending work-in-process Inventories were $18,100 and $10,100 respectively.)
Transcribed Image Text:CanCo Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the following Information has been extracted: Number of units produced Cost of goods manufactured Work-in-process inventory, beginning Work-in-process inventory, ending Direct materials cost per unit Direct labour cost per unit Manufacturing overhead cost, total Manufacturing overhead cost Y= Level of Activity March The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month. $ 5,200 $260,800 31,000 53,000 Required: 1. For both March and June, determine the amount of manufacturing overhead cost added to production. (Hint: A useful way to proceed might be to construct a schedule of cost of goods manufactured.) Cost of goods manufactured Answer is complete but not entirely correct. July March X 9 11 ? July 9,400 $399,000 23,000 16,000 282,800 s 9 11 ? 2. By means of the high-low method of cost analysis, estimate a cost formula for manufacturing overhead. Express the variable portion of the formula in terms of a variable rate per unit of product. 392,000 3. Assume that CanCo produced 8,200 units in September. What will be the cost of goods manufactured? (Assume that beginning and ending work-in-process Inventories were $18,100 and $10,100 respectively.)
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