Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below. Month January February March Overhead Costs $53,300 54,620 Machine-Hours 2,200 2,260 2,500 60,500 April 3,220 65,420 May 3,400 67,710 June 4,000 69,480 July 4,600 75,270 August 5,200 76,640 September 4,900 74,260 October 3,400 67,400 November 2,560 62,190 December 4,600 73,410 Required: 1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed. cost element to the nearest dollar and the variable cost element to the nearest cent. Fixed cost Variable cost per machine hour 2. If the company expects to use 3,700 machine-hours next month, estimate total overhead costs. Total overhead costs

Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below. Month January February March Overhead Costs $53,300 54,620 Machine-Hours 2,200 2,260 2,500 60,500 April 3,220 65,420 May 3,400 67,710 June 4,000 69,480 July 4,600 75,270 August 5,200 76,640 September 4,900 74,260 October 3,400 67,400 November 2,560 62,190 December 4,600 73,410 Required: 1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed. cost element to the nearest dollar and the variable cost element to the nearest cent. Fixed cost Variable cost per machine hour 2. If the company expects to use 3,700 machine-hours next month, estimate total overhead costs. Total overhead costs

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter5: Product And Service Costing: Job-order System

Section: Chapter Questions

Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...

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Mema Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine hours. To check this, they collected the following data for the past 12 months. (See the picture for the table) Compute for the: Use the High-low method to estimate the fixed and variable portion of overhead costs based on machine hours.
Valdez Motors Co. makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine hours. To check this, they collected the following data for the past 12 months. Months Machine Hours Overhead Costs 175 P4,500 4225 170 160 4,321 5,250 4,800 5,100 4,450 4,200 5,475 4,760 4,325 3,975 190 175 6. 200 160 150 9. 210 10 180 11 170 12 145 Requirements: 1. Use the High-low method to estimate the fixed and variable portion of overhead costs based on machine hours. 2. If the plant is planning to operate at a level of 200 machine hours next period, what would be the estimated overhead costs? 3. Use the method of least square to estimate the fixed and variable portion of overhead costs based on machine hours. t2345078
Flash E Card Manufacturing manufactures software parts for the computer software systems that produce e -cards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part and the plant has excess capacity to produce the Flash ll part. The current market price of the Flash Il part is $500. The managerial accountant reported the following manufacturing costs and variable expense data: Flash E-Card Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials $800 $170 Direct labor $110 Variable manufacturing overhead Fixed manufacturing overhead (current production level) Variable selling expenses (only incurred on sales to outside consumers) $125 $140 If the highest acceptable transfer price is $500 in the market, what is the lowest acceptable in house price the Data Department should receive to produce the part in house at the Computer Department? O A. $1,080 О В. $800 О С. $170 O D. $110
Flash E−Card Manufacturing manufactures software parts for the computer software systems that produce e−cards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part, and the plant has excess capacity to produce the Flash II part. The current market price of the Flash II part is $900. The managerial accountant reported the following manufacturing costs and variable expense data: Flash E−Card Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials $860 Direct labor $110 Variable manufacturing overhead $150 Fixed manufacturing overhead (current production level) $145 Variable selling expenses (only incurred on sales to outside consumers) $118 If the highest acceptable transfer price is $900 in the market, what is the lowest acceptable in−house price the Data Department should receive to produce the part in−house at the ComputerDepartment?
Budz Manufacturing Company is engaged in manufacturing motorcycles. The management we wants to estimate overhead costs to plan its operations. A recent trade publication revealed that factory overhead costs tend to vary with machine hours. To check this, they collected the following data for the past 10 months.008. Month $0. 1 2 3 4567 9 10 Wha .000.0 Machine Hours 3,000 3,600 3,300 2,970 3,600 3,750 3,900 10120801 12000 i 2,400 bodlomisdang ad 3,150 3,600 bodem wol agua sdin mtotoocani DOA Factory Overhead Cost P. 84,000.00 96,900.00 93,045.00 83,490.00 105,600.00 103,500.00 106,800.00 70,110.00:batiop 100,350.00 nobiroo on and onsuised adi S bodo For the next month, the company is planning to operate at a level of 3,750 machine hours. vollot adsens 0739921 eqer88,800.00 50-90 1014 avode svig stsb sifgcian des vig stsb af guiar designalais I Required: Using the high-low method, determine the following: 1. The variable portion of factory overhead cost based on machine hour. asuislino2…
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Fountain Water Products (FWP) manufacturers water bottles. They have historically used a traditional system that allocated the manufacturing overhead costs based on machine hours. FWP is looking at switching to an ABC system in order to ensure more accurate product costing. They first want to compare the traditional and ABC costing systems to determine if it is worth the effort and costs to implement and maintain. They estimate a total overhead cost of $459,000. Under the traditional system they identified machine hours as the cost driver, and estimated a total of 51,000 machine hours. They actually incurred 48,700 machine hours in production. The total applied MOH calculated under the more precise ABC system was $320,000. The ABC costing system will cost $50,000 to implement. FWP has determined that a benefit of more accurate costing by $80,000 is worth the $50,000 implementation cost. What is the difference between the ABC costing and traditional system? Enter your number as a…
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.
Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)