Correct answer Granger Corporation's high and low levelsof activity last year were 50,000 units ofproduct produced in June and 25,000 unitsproduced in December. Machine maintenancecosts were $140,000 in June and $80,000 inDecember. Using the high-low method,determine an estimate of total maintenancecost for a month in which production isexpected to be 40,000 units.

High-low method uses historical data to separate fixed and variable costs. Step 1: Identify High and…

Answered: Granger Corporation's high and low…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CMA

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
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.
Gribble Company's high and low level of activity last year was 60,000 units of product produced in May and 20,000 units produced in November. Machine maintenance costs were $156,000 in May and $60,000 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 45, 000 units.
Balcom Enterprises is planning to introduce a new product that will sell for $120 per unit. Manufacturing cost estimates for 28,000 units for the first year of production are: Direct materials $1,372,000. Direct labor $630,000 (based on $18 per hour × 35,000 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, what percentage of the variation in overhead costs is explained by the independent variable?
Gribble Company’s high and low level of activity last year was 60,000 units of product produced in May and 20,000 units produced in November. Machine maintenance costs were $156,000 in May and $60,000 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 45,000 units. Group of answer choices $117,000 $135,000 $120,000 $144,000
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
Machine hours in a month? General accounting
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
Ultravision Limited anticipates sales of $430,000 from January through April. Materials will represent 60 percent of sales and because of level production, material purchases will be equal for each month during these four months. Materials are paid for one month after the month purchased. Materials purchased in December of last year were $39,000 (half of $78,000 in sales). Labour costs for each of the four months are slightly different due to a provision in the labour contract in which bonuses are paid in February and April. Fixed overhead is $25,000 monthly. The labour figures are: January $29,000 February 32,000 March 29,000 April 34,000 Prepare a schedule of cash payments for January through April. Ultravision Limited Cash Payment Schedule Purchases Payment to material purchases Labour Fixed overhead Total cash payments December January February March April $ $ $ $ $ $ $ $ $
Asuma Company's high and low level of activity
Cortez Company is planning to introduce a new product that will sell for $108 per unit. The following manufacturing cost estimates have been made on 20,000 units to be produced the first year: Direct materials $ 800,000 Direct labor 800,000 (= $16 per hour × 50,000 hours) Manufacturing overhead costs have not yet been estimated for the new product, but monthly data on total production and overhead costs for the past 24 months have been analyzed using simple linear regression. The following results were derived from the simple regression and provide the basis for overhead cost estimates for the new product. Simple Regression Analysis Results Dependent variable—Factory overhead costs Independent variable—Direct labor-hours Computed values Intercept $ 120,000 Coefficient on independent variable $ 5.00 Coefficient of correlation .917 R2 .841 Required: a. What percentage of the variation in overhead…
Balcom Enterprises is planning to introduce a new product that will sell for $145 a unit. Manufacturing cost estimates for 25,000 units for the first year of production are: • Direct materials $1,500,000. • Direct labor $900,000 (based on $18 per hour x 50,000 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 O 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)? O O $106 $97 $88 Factory overhead costs Direct labor hours. $130,000 $83 $ 5.00 0.941 0.834

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