Problem 3-15 High-Low Method; Predicting Cost [LO1, LO2]Crosshill Company's total overhead costs at various levels of activity are presented below:Total OverheadMonthMachine-HoursCostAprilMay120,000110, 000130, 000140, 000$206, 800$319,000$361,000$391, 000JuneJulyAssume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the110,000-machine-hour level of activity in May is as follows:Utilities (variable)Supervisory salaries (fixed)Maintenance (mixed)$ 88,00025, 000125, еееTotal overhead cost$238, 000The company wants to break down the maintenance cost into its variable and fixed cost elements.Required:1. Estimate how much of the $391,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much ofthe $391,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevantrange.) (Round the "Variable cost per unit" to 2 decimal places.)Maintenance cost in July2. Using the high-low method, estimate a cost formula for maintenance. (Round the "Variable cost per unit" to 2 decimal places.)Machine- HoursMaintenance CostHigh activity levelLow activity levelChange2$Variable cost elementper MHFixed cost element Y =3. Express the company's total overhead cost in the form Y = a + bX. (Round the "Variable cost per unit" to 2 decimal places.)Variable Cost perFixed CostMachine-HourUtilities costSupervisory salaries costMaintenance costTotal overhead cost0.00Y =4. What total overhead cost would you expect to be incurred at an activity level of 78,000 machine-hours? (Round the "Variable costper unit" to 2 decimal places.)Total overhead cost

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Problem 3-15 High-Low Method; Predicting Cost [LO1, LO2] Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Cost $206,800 $319,000 $361,еее $391,e00 Month Machine-Hours April May 120, e00 110,e00 130, e00 140, 000 June July Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 110,000-machine-hour level of activity in May is as follows: Utilities (variable) $ 88.000

Problem 3-15 High-Low Method; Predicting Cost [LO1, LO2] Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Cost $206,800 $319,000 $361,еее $391,e00 Month Machine-Hours April May 120, e00 110,e00 130, e00 140, 000 June July Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 110,000-machine-hour level of activity in May is as follows: Utilities (variable) $ 88.000

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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