PRU Corporation uses the high-low method to estimate manufacturing overhead cost, which is a mixed cost. The company believes direct labor hours is the primary driver of manufacturing overhead cost. According to PRU's high-low cost function, the variable manufacturing overhead rate is $10.20 per direct labor hour. At the high level of activity, PRU Corporation used 15,260 direct labor hours. At the low level of activity, the company used 14,860 direct labor hours. If total manufacturing overhead cost at PRU Corporation was $93,120 at the high level of activity, then what was the total manufacturing overhead cost at the low level of activity? $80,880 O $102,720 $94,960 $89,040 None of the above
PRU Corporation uses the high-low method to estimate manufacturing overhead cost, which is a mixed cost. The company believes direct labor hours is the primary driver of manufacturing overhead cost. According to PRU's high-low cost function, the variable manufacturing overhead rate is $10.20 per direct labor hour. At the high level of activity, PRU Corporation used 15,260 direct labor hours. At the low level of activity, the company used 14,860 direct labor hours. If total manufacturing overhead cost at PRU Corporation was $93,120 at the high level of activity, then what was the total manufacturing overhead cost at the low level of activity? $80,880 O $102,720 $94,960 $89,040 None of the above
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PRU Corporation uses the high-low method to estimate manufacturing overhead cost, which
is a mixed cost. The company believes direct labor hours is the primary driver of
manufacturing overhead cost. According to PRU's high-low cost function, the variable
manufacturing overhead rate is $10.20 per direct labor hour. At the high level of activity, PRU
Corporation used 15,260 direct labor hours. At the low level of activity, the company used
14,860 direct labor hours. If total manufacturing overhead cost at PRU Corporation was
$93,120 at the high level of activity, then what was the total manufacturing overhead cost at
the low level of activity?
$80,880
O $102,720
O $94,960
O $89,040
O None of the above
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