1 part A: Determine the machine supplies cost and depreciation for January. 1 part b: Using the high-low method, analyze Metcalf’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. 1 part c: Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 29,400 direct-labor hours are worked. The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs.MonthJanuaryFebruaryMarchAprilMayJuneDirect-LaborHours32,00034,00044,00035,00039,00037,000ManufacturingOverhead$ 696,000735,000894,000753,000798,000795,000March's costs consisted of machine supplies ($228,800), depreciation ($30,000), and plant maintenance ($635,200).These costs exhibit the following respective behavior: variable, fixed, and semivariable.The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost,which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $75,000. The costis $150,000 from 15,000 to 29,999 hours and $225,000 when activity reaches 30,000 hours or more.

Cost Behavior refers to the change the cost of goods or services due to the change in the quantity…

Answered: The following selected data were taken…

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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1 part A: Determine the machine supplies cost and depreciation for January.

1 part b: Using the high-low method, analyze Metcalf’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour.

1 part c: Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 29,400 direct-labor hours are worked.

The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-
labor hours as its cost driver for overhead costs.
Month
January
February
March
April
May
June
Direct-Labor
Hours
32,000
34,000
44,000
35,000
39,000
37,000
Manufacturing
Overhead
$ 696,000
735,000
894,000
753,000
798,000
795,000
March's costs consisted of machine supplies ($228,800), depreciation ($30,000), and plant maintenance ($635,200).
These costs exhibit the following respective behavior: variable, fixed, and semivariable.
The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost,
which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $75,000. The cost
is $150,000 from 15,000 to 29,999 hours and $225,000 when activity reaches 30,000 hours or more.

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