The quarterly production and overhead costs for the year are shown below. Quarter Production (units) Overheads 14,900 $66,000 2 5,200 $69,000 3 5,400 $70,000 4 4,400 $60,000 What is the variable overhead cost per unit according to the high-low method?

The quarterly production and overhead costs for the year are shown below. Quarter Production (units) Overheads 14,900 $66,000 2 5,200 $69,000 3 5,400 $70,000 4 4,400 $60,000 What is the variable overhead cost per unit according to the high-low method?

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

The quarterly production and overhead costs for
the year are shown below.
Quarter Production (units) Overheads
14,900 $66000
2 5,200 $69,000
3 5,400 $70,000
4 4,400 $60,000
What is the variable overhead cost per unit
according to the high-low method?

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