Problem 3-11 High-Low Method; Cost of Goods Manufactured [LO2] Sarnia Ltd. is a manufacturing company that produces a single product. The company keeps meticulous records of manufacturing activities from which the following information has been extracted: Number of units produced Cost of goods manufactured Work in process inventory, beginning Work in process inventory, ending. Direct materials cost per unit Direct labour cost per unit Manufacturing overhead cost, total March-Low 6,050 $176,400 $ 13,500. $ 22,500 $ $ 6 10 ? Manufacturing overhead cost for March Manufacturing overhead cost for June June-High 9,075 $274,500 $ 48,000 $ 31,500 6 10 ? The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning. management wants to determine how much of the overhead cost varies with the number of units produced versus how much is fixed per month. Required: 1. For both March and June, estimate the amount of manufacturing overhead cost added to production.
Problem 3-11 High-Low Method; Cost of Goods Manufactured [LO2] Sarnia Ltd. is a manufacturing company that produces a single product. The company keeps meticulous records of manufacturing activities from which the following information has been extracted: Number of units produced Cost of goods manufactured Work in process inventory, beginning Work in process inventory, ending. Direct materials cost per unit Direct labour cost per unit Manufacturing overhead cost, total March-Low 6,050 $176,400 $ 13,500. $ 22,500 $ $ 6 10 ? Manufacturing overhead cost for March Manufacturing overhead cost for June June-High 9,075 $274,500 $ 48,000 $ 31,500 6 10 ? The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning. management wants to determine how much of the overhead cost varies with the number of units produced versus how much is fixed per month. Required: 1. For both March and June, estimate the amount of manufacturing overhead cost added to production.
Chapter1: Financial Statements And Business Decisions
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![Problem 3-11 High-Low Method; Cost of Goods Manufactured [LO2]
Sarnia Ltd. is a manufacturing company that produces a single product. The company keeps meticulous records of manufacturing
activities from which the following information has been extracted:
Number of units produced
Cost of goods manufactured
Work in process inventory, beginning
Work in process inventory, ending.
Direct materials cost per unit
Direct labour cost per unit
Manufacturing overhead cost, total
March-Low
6,050
$176,400
$ 13,500.
$ 22,500
$
$
6
10
?
Manufacturing overhead cost for March
Manufacturing overhead cost for June
June-High
9,075
$274,500
$ 48,000
$ 31,500
6
10
?
The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning.
management wants to determine how much of the overhead cost varies with the number of units produced versus how much is fixed
per month.
Required:
1. For both March and June, estimate the amount of manufacturing overhead cost added to production.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb5b7276f-0b39-4e81-a59c-522f0cdd9ee7%2Fe9958a0a-727b-4b73-8902-2c90fe5701d9%2Fygizuaj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 3-11 High-Low Method; Cost of Goods Manufactured [LO2]
Sarnia Ltd. is a manufacturing company that produces a single product. The company keeps meticulous records of manufacturing
activities from which the following information has been extracted:
Number of units produced
Cost of goods manufactured
Work in process inventory, beginning
Work in process inventory, ending.
Direct materials cost per unit
Direct labour cost per unit
Manufacturing overhead cost, total
March-Low
6,050
$176,400
$ 13,500.
$ 22,500
$
$
6
10
?
Manufacturing overhead cost for March
Manufacturing overhead cost for June
June-High
9,075
$274,500
$ 48,000
$ 31,500
6
10
?
The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning.
management wants to determine how much of the overhead cost varies with the number of units produced versus how much is fixed
per month.
Required:
1. For both March and June, estimate the amount of manufacturing overhead cost added to production.
Transcribed Image Text:per munus
Required:
1. For both March and June, estimate the amount of manufacturing overhead cost added to production.
Manufacturing overhead cost for March
Manufacturing overhead cost for June
2. Using the high-low method, estimate a cost formula for manufacturing overhead.
Y=
3. If 7,050 units are produced during a month, what would be the cost of goods manufactured? Assume that work in process
inventories do not change.
Cost of goods manufactured
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Step 1: Introduce to variable cost and fixed cost
VIEWStep 2: Working for direct materials cost and direct labor cost
VIEWStep 3: Working for manufacturing overhead cost for March
VIEWStep 4: Working for manufacturing overhead cost for June
VIEWStep 5: Working for cost equation using high low method
VIEWStep 6: Working for cost of goods manufactured at 7,050 units
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