The GNR Manufacturing Co. recorded overhead costs of $21,500 at an activity level of 5,000 machine hours and $8,000 at 2,500 machine hours. The records also indicated that overhead of $10,000 was incurred at 4,200 machine hours. Using the high-low method to estimate the cost equation, determine the variable cost per machine hour.

The GNR Manufacturing Co. recorded overhead costs of $21,500 at an activity level of 5,000 machine hours and $8,000 at 2,500 machine hours. The records also indicated that overhead of $10,000 was incurred at 4,200 machine hours. Using the high-low method to estimate the cost equation, determine the variable cost per machine hour.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 7EB: Rocks Industries has two products. They manufactured 12,539 units of product A and 8.254 units of...

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