Problem 5A-8 (Algo) High-Low Method; Predicting Cost [LO5 - 10] Nova Company's totaloverhead cost at various levels of activity are presented below: Month Machine - Hours TotalOverhead Cost April 47,000 $ 201, 500 May 37,000 $ 175, 500 June 57,000 S 227, 500 July67,000 $ 253, 500 Assume the total overhead cost above consists of utilities, supervisorysalaries, and maintenance. The breakdown of these costs at the 37,000 machine - hour levelof activity is: Utilities (variable) S 51, 800 Supervisory salaries (fixed) 66, 000 Maintenance (mixed) 57,700 Total overhead cost $ 175, 500 Nova Company's management wants to breakdown the maintenance cost into its variable and fixed cost elements. Required: Estimate howmuch of the $253, 500 of overhead cost in July was maintenance cost. (Hint: To do this, it maybe helpful to first determine how much of the $253, 500 consisted of utilities and supervisorysalaries. Think about the behavior of variable and fixed costs.) Using the high-low method,estimate a cost formula for maintenance in the form Y = a + bx. Express the company'stotal overhead cost in the form Y = a + bX. What total overhead cost would you expect atan activity level of 42,000 machine - hours? Complete this question by entering your answersin the tabs below. Required 2 Required 3 Express the company's total overhead cost in theform Y = a + bx. Note: Do not round your intermediate calculations. Round the "Variablecost per machine hour" to 2 decimal places. Complete this question by entering your answers in the tabs below.Required 1Required 2 Required 3 Required 4Express the company's total overhead cost in the form Y = a + bx.Note: Do not round your intermediate calculations. Round the "Variable cost per machine hour" to 2 decimal places.Utilities costSupervisory salaries costMaintenance costTotal overhead costY =Variable Costper Machine-Hour$+Fixed Cost0.00 $0< Required 2Required 4 >

High low method is a technique of finding out the fixed and variable costs from the total cost…

Problem 5A-8 (Algo) High - Low Method; Predicting Cost [LO5-10] Nova Company's total overhead cost at various levels of activity are presented below: Month Machine - Hours Total Overhead Cost April 47,000 $ 201, 500 May 37,000 $ 175, 500 June 57,000 S 227,500 July 67,000 S 253, 500 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 37,000 machine - hour level of activity is: Utilities (variable) $ 51, 800 Supervisory salaries (fixed) 66,000 Maintenance ( mixed) 57,700 Total overhead cost $ 175,500 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: Estimate how much of the $253, 500 of overhead cost in July was maintenance cost. (Hint: To do this, it may

Problem 5A-8 (Algo) High - Low Method; Predicting Cost [LO5-10] Nova Company's total overhead cost at various levels of activity are presented below: Month Machine - Hours Total Overhead Cost April 47,000 $ 201, 500 May 37,000 $ 175, 500 June 57,000 S 227,500 July 67,000 S 253, 500 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 37,000 machine - hour level of activity is: Utilities (variable) $ 51, 800 Supervisory salaries (fixed) 66,000 Maintenance ( mixed) 57,700 Total overhead cost $ 175,500 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: Estimate how much of the $253, 500 of overhead cost in July was maintenance cost. (Hint: To do this, it may

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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X Company accumulates the following data about maintenance costs, a mixed cost, using hours as the activity level: Hours Cost 35.000 $185.000 August September 40,000 210,000 October 30.000 160,000 November 42,000 220,000 December 51.000 265.000 Based on the above, in applying the high-low method, what is the unit variable cost? * $5 $0.5 O $2.05 None of the above
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Using the step method, how much of NUBD Corporation’s Utilities Department cost is allocated between Departments A and B?