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Harrison Company has accumulated the following total manufacturing overhead costs for two levels of activity (within the relevant range): Low 80,000 High Activity (direct labor hours) 120,000 Total manufacturing overhead $819,000 $1,057,000 The total overhead cost includes variable, fixed, and mixed costs. At 120,000 direct labor hours, the total cost breakdown is as follows: Variable cost Fixed cost $462,000 280,000 Semi-mixed cost $315,000 a. Using the high-low method of cost analysis, determine the variable portion of the semi-variable cost per direct labor hour. Determine the total fixed cost component of the mixed cost. Isolate mixed costs: Do not use negative signs with your answers. Low 819,000 308,000 280,000 Total mixed cost $231,000$ Total cost Less: Variable cost Fixed cost High Low Difference High-Low Analysis: Round variable portion per unit to two decimal places, if applicable. $ Direct Labor Hours Total Mixed Cost Variable Portion Fixed Portion 120.000 $ 315,000 231,000 0x = $ 0x 0x 0x 80.000 Variable portion per unit: $0 Variable cost Fixed cost Mixed: Variable portion Fixed portion Totals High $1,057,000✔ 462,000✔ 280,000 315,000 0x $ b. What should the total planned overhead cost be at 100,000 direct labor hours? Variable Cost Per Unit Fixed Costs 0x x 0x 0x 0 x $ 0x 0x 0x Total planned overhead for 100,000 direct labor hours $0. x

Harrison Company has accumulated the following total manufacturing overhead costs for two levels of activity (within the relevant range): Low 80,000 High Activity (direct labor hours) 120,000 Total manufacturing overhead $819,000 $1,057,000 The total overhead cost includes variable, fixed, and mixed costs. At 120,000 direct labor hours, the total cost breakdown is as follows: Variable cost Fixed cost $462,000 280,000 Semi-mixed cost $315,000 a. Using the high-low method of cost analysis, determine the variable portion of the semi-variable cost per direct labor hour. Determine the total fixed cost component of the mixed cost. Isolate mixed costs: Do not use negative signs with your answers. Low 819,000 308,000 280,000 Total mixed cost $231,000$ Total cost Less: Variable cost Fixed cost High Low Difference High-Low Analysis: Round variable portion per unit to two decimal places, if applicable. $ Direct Labor Hours Total Mixed Cost Variable Portion Fixed Portion 120.000 $ 315,000 231,000 0x = $ 0x 0x 0x 80.000 Variable portion per unit: $0 Variable cost Fixed cost Mixed: Variable portion Fixed portion Totals High $1,057,000✔ 462,000✔ 280,000 315,000 0x $ b. What should the total planned overhead cost be at 100,000 direct labor hours? Variable Cost Per Unit Fixed Costs 0x x 0x 0x 0 x $ 0x 0x 0x Total planned overhead for 100,000 direct labor hours $0. x

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Harrison Company has accumulated the following total manufacturing overhead costs for two levels of activity (within the relevant range): Low Activity (direct labor hours) 80,000 Tatal manufacturing overhead $819,000 $1,057,000 The total overhead cost includes variable, fixed, and mixed costs. At 120,000 direct labor hours, the total cost breakdown is as follows: Variable cost $462,000 Fixed cost 280,000 Semi-mixed cost $315,000 a. Using the high-low method of cost analysis, determine the variable portion of the semi-variable cost per direct labor hour. Determine the total fixed cost component of the mixed cost. Isolate mixed costs: Do not use negative signs with your answers. Low High 815,000 $1,057,000 ✓ 308,000✔ 462,000 ✓ 280,000 ✓ 280,000✔ Total mixed cost $ 231,000 $315,000 ✓ Total cost Less: Variable cost Fixed cost High Low High-Low Analysis: Round variable portion per unit to two decimal places, if applicable. Variable Portion $ 0x 0 x Difference $ Direct Labor Hours Total Mixed Cost 120,000 $ 315,000 231,000 ✓ 0 x 80.000 ✓ Variable portion per unit: $ 0 Variable cost Fixed cost Mixed: Variable portion Fixed portion Totals High 120,000 0 x $ b. What should the total planned overhead cost be at 100,000 direct labor hours? Variable Cost Per Unit Fixed Costs $ 0 x $ x 0x $ 0 x $ 0x 0 x 0x Fixed Portion $ 0x 0 x Total planned overhead for 100,000 direct labor hours $ 0 x
Transcribed Image Text:Harrison Company has accumulated the following total manufacturing overhead costs for two levels of activity (within the relevant range): Low Activity (direct labor hours) 80,000 Tatal manufacturing overhead $819,000 $1,057,000 The total overhead cost includes variable, fixed, and mixed costs. At 120,000 direct labor hours, the total cost breakdown is as follows: Variable cost $462,000 Fixed cost 280,000 Semi-mixed cost $315,000 a. Using the high-low method of cost analysis, determine the variable portion of the semi-variable cost per direct labor hour. Determine the total fixed cost component of the mixed cost. Isolate mixed costs: Do not use negative signs with your answers. Low High 815,000 $1,057,000 ✓ 308,000✔ 462,000 ✓ 280,000 ✓ 280,000✔ Total mixed cost $ 231,000 $315,000 ✓ Total cost Less: Variable cost Fixed cost High Low High-Low Analysis: Round variable portion per unit to two decimal places, if applicable. Variable Portion $ 0x 0 x Difference $ Direct Labor Hours Total Mixed Cost 120,000 $ 315,000 231,000 ✓ 0 x 80.000 ✓ Variable portion per unit: $ 0 Variable cost Fixed cost Mixed: Variable portion Fixed portion Totals High 120,000 0 x $ b. What should the total planned overhead cost be at 100,000 direct labor hours? Variable Cost Per Unit Fixed Costs $ 0 x $ x 0x $ 0 x $ 0x 0 x 0x Fixed Portion $ 0x 0 x Total planned overhead for 100,000 direct labor hours $ 0 x
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