Granger Corporation's high and low levels of activity last year were 50,000 units of product produced in June and 25,000 units produced in December. Machine maintenance costs were $140,000 in June and $80,000 in December. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 40,000 units.

Granger Corporation's high and low levels of activity last year were 50,000 units of product produced in June and 25,000 units produced in December. Machine maintenance costs were $140,000 in June and $80,000 in December. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 40,000 units.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

See similar textbooks

Similar questions

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.
The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced Each unit requires 0.25 direct labor-hours and direct laborers are paid $14.00 per hour. In addition, the variable manufacturing overhead rate is $1.60 per direct labor-hour. The fixed manufacturing overhead is $95,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $35,000 per quarter. Required: 1. Calculate the company's total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. 2. and 3. Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 11,500 10,500 12,500 13,500 Complete this question by entering your answers in the tabs below. Req 1…
Machine hours in a month? General accounting
Dermody Snow Removal's cost formula for its vehicle operating cost is $3,060 per month plus $336 per snow-day. For the month of December, the company planned for activity of 18 snow-days, but the actual level of activity was 20 snow-days. The actual vehicle operating cost for the month was $9,385. The spending variance for vehicle operating cost in December would be closest to:
Erkkila Inc. reports that at an activity level of 6,100 machine-hours in a month, its total variable inspection cost is $425,480 and its total fixed inspection cost is $166,656. What would be the total variable inspection cost at an activity level of 6,400 machine-hours in a month? Assume that this level of activity is within the relevant range.
Dermody Snow Removal's cost formula for its vehicle operating cost is $2,900 per month plus $320 per snow-day. For the month of December, the company planned for activity of 15 snow-days, but the actual level of activity was 13 snow- days. The actual vehicle operating cost for the month was $7,980. The spending variance for vehicle operating cost in December would be closest to:
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?
The armour company has the following revenue and costs in the most recently completed fiscal year. Total revenue is $10,000,000. Total fixed costs is $4,000,000. Total variable costs is $5,000,000. Total units produced and sold is $1,000,000. What is the unit sales volume at the break-even point?
Balcom Enterprises is planning to introduce a new product that will sell for $120 a unit. Manufacturing cost estimates for 28,000 units for the first year of production are: Direct materials $1,372,000. Direct labor $1,008,000 (based on $18 per hour × 56,000 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, how much is the variable manufacturing cost per unit, using the variable overhead estimated by the regression (assuming that direct materials and direct labor are variable costs)? Multiple Choice $72 $92 $95 $77
Eberley Corporation's cost formula for its manufacturing overhead is $25,700 per month plus $10 per machine-hour. For the month of July, the company planned for activity of 5,900 machine-hours, but the actual level of activity was 5,920 machine- hours. The actual manufacturing overhead for the month was $86,800. The spending variance for manufacturing overhead in July would be closest to: $2,100 U $1,900 F $1,900 U $2,100 F
The highest value of total cost was $880,000 in June for Mantilla Beverages, Inc. Its lowest value of total cost was $630,000 in December. The company makes a single product. The production volumes in June and December were 17,000 and 12,000 units, respectively. What is the fixed cost per month? (Round any intermediate calculations to the nearest cent, and the final answer to the nearest dollar.)
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 x 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: Dependent variable Independent variable Intercept Coefficient on independent variable Coefficient of correlation R² Multiple Choice Based on this information, what is the total overhead cost for an estimated activity level of 43,000 direct labor-hours? $392,000 $144,000 $804,000 Factory overhead costs Direct labor hours. $134,000 $ $258.000 6.00 0.953 0.842