Ans plz general accounting Identify the choice that best completes the statement or answers the question:6. Retleb Manufacturing Company noticed that, during its busiest month of2014, maintenance costs totaled $15,400, resulting from the production of32,000 units. During its slowest month, $12,600 in maintenance costs wereincurred, resulting from the production of 24,000 units. Use the high-lowmethod to estimate the maintenance cost that he company will incur if itproduces 20,000 units.a. $7,000b. $11,200c. $8,400d. $2,800

Step 1: Definition of the High-Low MethodThe high-low method is a cost estimation technique used to…

Answered: Identify the choice that best completes…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 8EA: Using the information in the previous exercises about Marleys Manufacturing, determine the operating...

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The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor Costs Busiest month (June) 17,500 $ 229,022 Slowest month (December) 10,200 $ 155,000 If Macon expects to use 13,500 machine hours next month, what are the estimated direct labor costs?
2. Gemini is having trouble understanding its manufacturing overhead costs. A couple of years ago, management used the conference method and determined that the its monthly manufacturing overhead costs consisted of $10,000 plus $50 for every machine hour. The actual costs and those based on the conference method were significantly different from each other the last few months. Management has asked you to analyze its costs to better predict manufacturing overhead costs. Management has the following data from the past year for you. Manufacturing Month Machine Hours Overhead Costs 1 1,200 $74,000 2 1,000 70,000 1,400 82,000 4 1,700 86,000 1,650 87,500 6 1,800 87,000 1,900 92,000 8 1,800 90,000 9. 2,000 98,000 10 3,000 130,000 11 2,200 102,000 12 2,600 109,000 1. Use the High-Low method and estimate the linear cost relationship for manufacturing overhead costs. 2. Compare the predicted costs for months 11 and 12 using your cost relationship to that previously used. Which is better and why?…
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Deep South Glass Company is exploring different prediction models that can be used to forecast machine maintenance costs. One independent variable under consideration is machine hours. Following are matching observations on machine maintenance costs and machine hours for the past six months: Month Machine hours Machine Maintenance costs 1 300 $20,000 400 $24,000 3 240 $17,000 4 370 $22,000 5 200 $13,000 6 225 $14,000 In a high-low model, which months' observations would be used to compute the model's parameters? 4 and 5 1 and 6 2 and 6 O 2 and 5
Hapza cleaning services has opening hours that fluctuate from month to month. The electricity costs and hours of operation for past six months is listed below: Month Total hours of operation Total electricity cost January 650 $ 4 240 February 700 $ 4 400 March 800 $ 4 800 April 600 $ 4 200 May 550 $ 3 700 June 500 $ 3 600 Required: (a) Use the high-low method to estimate the cost behaviour for the complex’s electricity costs, assuming that the variable costs vary in proportion to the hours of operation. Express the total cost behaviour in formula form (Y = a + bx). What is the variable electricity cost per hour of operation? (b) During July, the complex will open for 570 hours. Predict the complex’s total electricity costs for July using the cost estimation method employed in above requirement (a). (c) What is the main drawback of the high-low method of cost estimation?
30. Tim Horton, an accountant for Brent, Inc., has decided to estimate the fixed and variable components associated with the company’s repair activity. She has collected the following data for the past six months. Estimate the fixed and variable components for the repair costs using the high-low method. Using the cost formula, predict the total cost of repair if 14 hours are used.
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Juan Company considers repairs and maintenance (R&M) to be a mixed cost. Over the past five months they've had the following R&M costs: Month Units Produced Total R&M cost February 400 $5, 680 March 350 $4, 800 April 870 $6, 900 May 300 $4, 890 June 800 $7,350 Using the High-Low method calculate the expected cost of R&M for July assuming they expect 1,000 units to be produced
[The following information applies to the questions displayed below.] Burchard Company sold 42,000 units of its only product for $17.40 per unit this year. Manufacturing and selling the product required $314,000 of fixed costs. Its per unit variable costs follow. Direct materials Direct labor Variable overhead costs Variable selling and administrative costs For the next year, management will use a new material, which will reduce direct materials costs to $1.41 per unit and reduce direct labor costs to $2.59 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling and administrative costs per unit will not change. Management is also considering raising its selling price to $22.62 per unit, which would decrease unit sales volume to 35,700 units. Required: 1. Compute the contribution margin per unit from (a) using the new material and (b) using the new material and increasing the selling price. (Round your answers to 2 decimal places.) Sales price per…
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4. For each following activity, determine the amount of value-added and non-value-added costs. a. The company keeps 7 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs are $50,000 per day. b. A time-and-motion study revealed that it should take 10 minutes to produce a product that now takes 50 minutes to produce. Labor is $18 per hour. c. Warranty work costs the firm $500,000 per year. Warranty costs for the industry average $100,000 per year.
Product BW of Blair Designs generates sales revenue of $40,000. The product incurs variable costs of goods sold of $22,000, fixed selling costs of $22,000, and fixed factory overhead of $21,000. Determine if Product BW should be continued or discontinued. Assume that the company will incur the fixed factory overhead regardless of the decision. Support your conclusion with numbers. The fixed selling cost is avoidable.

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