QUESTION 4XYZ Inc. employed several maintenance engineers to keep the equipment running in peakcondition. Over the past eight months, Travis incurred the following maintenance cost forthese engineers. Plant activity is best measured by direct labor hours.ITTDirect Labor HoursMaintenance CostMonthJanuaryFebruary1,700$14,300$16,200$16,700$14,0002,0001,8001,6001,5001,300MarchAprilMay$14,300JuneS13,0001,000JulyAugust$12,2001,400$14,200REQUIREDa) Using the high-low method, determine the fixed and variable components of themaintenance costs.b) Briefly explain advantage using ABC Costing in managementSystems7

QUESTION 4 XYZ Inc. employed several maintenance engineers to keep the equipment running in peak condition. Over the past eight months, Travis incurred the following maintenance cost for these engineers. Plant activity is best measured by direct labor hours. Month Direct Labor Hours Maintenance Cost January February 1,700 S14,300 2,000 S16,200 March 1,800 S16,700 April May 1,600 S14,000 S14,300 S13,000 1,500 June 1,300 July August S12,200 $14,200 1,000 1,400 REQUIRED a) Using the high-low method, determine the fixed and variable components of the maintenance costs. b) Briefly explain advantage using ABC Costing in management Systems

QUESTION 4 XYZ Inc. employed several maintenance engineers to keep the equipment running in peak condition. Over the past eight months, Travis incurred the following maintenance cost for these engineers. Plant activity is best measured by direct labor hours. Month Direct Labor Hours Maintenance Cost January February 1,700 S14,300 2,000 S16,200 March 1,800 S16,700 April May 1,600 S14,000 S14,300 S13,000 1,500 June 1,300 July August S12,200 $14,200 1,000 1,400 REQUIRED a) Using the high-low method, determine the fixed and variable components of the maintenance costs. b) Briefly explain advantage using ABC Costing in management Systems

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1EA: Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor...

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The management of Casablanca Manufacturing Corporation believes that machine- hours is an appropriate measure of activity for overhead cost Shown below are machine hours and total overhead cost for the past six months: Machine- hours Overhead Cost Jan 150,000 P339,000 Feb 140,000 P328,000 Mar 160,000 P350,000 Apr 130,000 P319,500 May 170,000 P362,500 Jun 200,000 P400,000 Assume that the relevant range included all of the activity levels mentioned in this problem. If Casablanca expects to incur 185,000 machine hours next month, what will the estimated total overhead cost be using the high-low method?
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Using the attached, Was the overhead underallocated or overallocated? By how much?
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