Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours 1 $ 2,700 2 2,745 2,795 2,895 2,930 3,030 2,940 2,980 2,855 2,645 2,665 2,965 4 5 6 7 8 B9DL2 10 11 12 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollar.) Maintenance cost 1,629 1,740 1,755 1,805 1,800 1,895 1,820 1,855 1,845 1,485 1,700 1,500 $ 1,251 + ($ 0.9390 x M = Machine Hours |)

Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours 1 $ 2,700 2 2,745 2,795 2,895 2,930 3,030 2,940 2,980 2,855 2,645 2,665 2,965 4 5 6 7 8 B9DL2 10 11 12 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollar.) Maintenance cost 1,629 1,740 1,755 1,805 1,800 1,895 1,820 1,855 1,845 1,485 1,700 1,500 $ 1,251 + ($ 0.9390 x M = Machine Hours |)

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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