Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year,according to the number of machine-hours worked in its production facility. These costs at high and low levels ofactivity over recent years are given below:Machine-hoursTotal factoryoverhead costsIndirect materials(variable)Rent (fixed)Maintenance (mixed)Total factory overheadcostsThe factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzedthese costs at the 62,200 machine-hours level of activity as follows:Level of ActivityLow62,200$36, 159, 600MaintenancecostFor planning purposes, the company wants to break down the maintenance cost into its variable and fixed costelements.Required:1. Estimate how much of the factory overhead cost of $40,519,600 at the high level of activity consists of maintenancecost.Y =+High82, 200$40,519,600$22,600,000$ 9,019,00018,100,0009,040,600$36, 159, 6002. Using the high-low method, estimate a cost formula for maintenance.X3. What total overhead costs would you expect the company to incur at an operating level of 67,200 machine-hours?Total factory overheadcosts

The costs incurred for the production are classified as fixed and variable costs. The variable costs…

Answered: Colby Limited is a manufacturing…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

See similar textbooks

Similar questions

SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the number of machine-hours worked in its production facility. These costs at high and low levels of activity over recent years are given below: Machine-hours Total factory overhead costs Indirect materials (variable) Rent (fixed) Maintenance (mixed) Total factory overhead costs The factory overhead costs above consist of Indirect materials, rent, and maintenance. The company has analyzed these costs at the 61,000 machine-hours level of activity as follows: Maintenance cost Level of Activity Low 61,000 $30,491,000 Y= For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the factory overhead cost of $34,611,000 at the high level of activity consists of maintenance cost. High $ 8,540,000 14,800,000 7,151,000 $30,491,000 X Total factory overhead costs 81,000…
Sawaya Co., Ltd., of Japan is a manufacturing company whose total factory overhead costs fluctuate considerably from year to year according to increases and decreases in the number of direct labor-hours worked in the factory. Total factory overhead costs at high and low levels of activity for recent years are given below: Direct Labor Hours 50,000 75,000 Total Factory Overhead Cost 16,250,000 20,000,000 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 50,000-hour level of activity as follows: Indirect Materials (Variable) 5,000,000 Rent (Fixed) 8,000,000 Maintenance (Mixed) 3,250,000 Total Factory overheads Cost 16,250,000 To have data available for planning, the company wants to break down the maintenance cost into its variable and fixed cost elements Required: 1. Estimate how much of the 20,000,000 factory overhead cost at the high level of activity consists of maintenance cost.…
Sawaya Co., Ltd., of Japan is a manufacturing company whose total factory overhead costs fluctuate considerably from year to year according to increases and decreases in the number of direct labor-hours worked in the factory. Total factory overhead costs at high and low levels of activity for recent years are given below: Direct Labor Hours 61,000 Total Factory Overhead Cost 16,625,000 14,000,000 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 61000 hour level of activity as follows: Indirect Materials (Variable) Rent (Fixed) Maintenance (Mixed) 1,998,000 Total Factory overheads Cost 14,000,000 To have data available for planning, the company wants to break down the maintenance cost into its variable and fixed cost elements 90,000 5,002,000 7,000,000 Required: 1. Estimate how much of the $16,625,000 factory overhead cost at the high level of activity consists of maintenance cost. (Hint: To do this, it…
am. 106.
Echeverria SA is an Argentinian manufacturing company whose total factory overhead costs fluctuate somewhat from year to year according to the number of machine-hours worked in its production facility. These costs (in Argentinian pesos) at high and low levels of activity over recent years are given below: Level of Activity Low High Machine hours 60,000 80,000 Total MOH costs 274,000 pesos 312,000 pesos The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 60,000 machine-hours level of activity as follows: Indirect Materials (variables) 90,000 Rent (fixed) 130,000 Maintenance (mixed) 54,000 Total Overhead Cost 274,000 For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the factory overhead cost of 312,000 pesos at the high level of activity consists of maintenance cost. 2. Using the high-low method,…
Younes Incorporated manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as P06. Data concerning this product are given below: Per Unit $ 220 $ 38 Selling price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling and administrative expense The above per unit data are based on annual production of 4,000 units of the component. Assume that direct labor is a variable cost. What is the current contribution margin per unit for component P06 based on its selling price of $220 and its annual production of 4,000 units? $ 1 $ 8 $ 16 $ 4 $16
What is the fixed overhead cost per unit on these financial accounting question?
Splunge Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the company's production and sales occur in the first and second quarters of the year. The company is in danger of losing one of its larger customers, Soho Wholesale, due to large fluctuations in price. The owner of Splunge has requested an analysis of the manufacturing cost per unit in the second and third quarters. You have been provided the following budgeted information for the coming year: E (Click the icon to view the budgeted information.) A (Click the icon to view additional information.) Read the requirements Requirement 1 and 2. Calculate the total manufacturing cost per unit for the second and third quarter assuming the company allocates manufacturing overhead costs based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate. First…
Spaine Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the company's production and sales occur in the first and second quarters of the year. The company is in danger of losing one of its larger customers, Sofo Wholesale, due to large fluctuations in price. The owner of Spaine has requested an analysis of the manufacturing cost per unit in the second and third quarters. You have been provided the following budgeted information for the coming year: (Click the icon to view the budgeted information.) (Click the icon to view additional information.) Read the requirements. Requirement 1 and 2. Calculate the total manufacturing cost per unit for the second and third quarter assuming the company allocates manufacturing overhead costs based on the budgeted manufacturing overhead rate determined for each quarter and an annual budgeted manufacturing overhead rate. First…
Chips Co., maker of computers, incurred the following cost during the year. Is the following cost item a fixed or variable cost? Wages paid to an assembly line worker Variable Fixed
Sawaya Co., Ltd., of Japan is a manufacturing company whose total factory overhead costsfluctuate considerably from year to year according to increases and decreases in the numberof direct labor-hours worked in the factory. Total factory overhead costs (in Japanese yen,denoted by ¥) at high and low levels of activity for recent years are given below:Level of ActivityLow HighDirect labor-hours 5,000 6,000Total factory overhead costs ¥4,250,000 ¥4,500,000The factory overhead costs above consist of indirect materials, rent, and maintenance. Thecompany has analyzed these costs at the 5,000-hour level of activity as follows:Indirect materials (Variable) ¥1,000,000Rent (Fixed) 2,000,000Maintenance (Mixed) 1,250,000Total factory overhead costs ¥4,250,000To have data available for planning, the company wants to break down the maintenance costinto its variable and fixed cost elements.Required:a) Estimate how much of the ¥4,500,000 factory overhead cost at the high level of activity consistsof…

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS