Kamala CEO Inc. makes trivia games. The following data pertains to the last six months: Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Direct Labor Hours Manufacturing Overhead 45,000 60,000 57,000 52,000 34,000 25,000 $295,000 $320,000 $323,000 $247,250 $178,200 $162,500 Based on this data, what would the estimated manufacturing overhead be at a level of 54,000 direct labor hours? (Hint: Use the high-low method) a. $266,000 b. $293,000

Kamala CEO Inc. makes trivia games. The following data pertains to the last six months: Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Direct Labor Hours Manufacturing Overhead 45,000 60,000 57,000 52,000 34,000 25,000 $295,000 $320,000 $323,000 $247,250 $178,200 $162,500 Based on this data, what would the estimated manufacturing overhead be at a level of 54,000 direct labor hours? (Hint: Use the high-low method) a. $266,000 b. $293,000

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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Nova Company's total overhead cost at various levels of activity are presented below: Total Overhead Cost Month April May June July Machine- Hours 54,000 44,000 64,000 74,000 $ 210,240 $ 183,140 $ 237,340 $ 264,440 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 44,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 70,400 47,000 65,740 $183,140 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $264,440 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $264,440 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a +…
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The following is the total overhead cost at various levels of activity for McRoy Company: Total Overhead Cost $222,000 $246,000 $198,000 $174,000 February March April May Direct Labour Hours 80,000 90,000 70,000 60,000 The total overhead cost above consists of utilities, rent and maintenance. The breakdown of these costs at the 60,000 direct labour hour level of activity is: Utilities (variable) Rent (fixed) Maintenance (Mixed) Total overhead cost $48,000 $21,000 $105,000 $174,000 McRoy Company wants to separate the maintenance cost into its variable and fixed components. Required: (a) Estimate how much of the $246,000 of overhead cost in March was maintenance cost. (b) Using the high low method, construct a cost formula for the maintenance cost. (c) Assume that 209,000 direct labour hours are budgeted for the third quarter of the year, what would be the total overhead cost for the quarter?
Nielsen Corporation has two manufacturing departments--Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (MHS) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per machine-hour Machining 1,000 $ 4,700 $ 1.20 Assembly 4,000 $ 10,800 $ 2.20 Total 5,000 $ 15,500 During the most recent month, the company started and completed two jobs--Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow: Direct materials Direct labor cost Machining machine-hours Assembly machine-hours Job F $13,000 Job M $ 7,400 $ 20,400 $ 8,800 700 1,600 300 2,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job F is closest to: (Round your intermediate calculations to 2 decimal places.)
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