22nd Edition

ISBN: 9781307839302

Author: Garrison

Publisher: MCG/CREATE

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Textbook Question

Chapter 5.A, Problem 8P

Problem 5A-8 High-Low Method; Predicting Cost LO5-10

Nova Company's total overhead cost at various levels of activity is presented below:

Month	Machine	Total
	Hours	Overhead
		Cost
April	70,000	$198,000
May	60,000	$174,000
June	80,000	222,000
July	90,000	246,000

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000 machine-hour level of activity is:

Utilities (Variable)		$48,000
Supervisory salaries (fixed)	21,000
Maintenance (mixed)		105,000
Total Overhead cost		$174,000

Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

Estimate how much of die $246,000 of overhead cost in July' was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.)

Using the high-low method, estimate a cost formula for maintenance in the form Y= a + bX.

Express the company's total overhead cost in the form Y= a + bX.

What total overhead cost would you expect to be incurred at an activity level of 75,000 machine-hours?

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Chapter 5.A, Problem 7P

Chapter 5.A, Problem 9P

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Chapter 5 Solutions

MANAGERIAL ACCOUNTING-W/ACCESS >C<

Ch. 5.A - EXERCISE 5A-1 High-Low Method LO5-10 The Cheyenne...Ch. 5.A - EXERCISE 5A-2 Least-Squares Regression LO5-11...Ch. 5.A - EXERCISE 5A-3 Cost Behavior; High-Low Method...Ch. 5.A - Prob. 4E Ch. 5.A - EXERCISE 5A-5 Least-Squares Regression LO5-11...Ch. 5.A - Prob. 6P Ch. 5.A - Problem 5A-7 Cost Behavior; High-Low Method;...Ch. 5.A - Problem 5A-8 High-Low Method; Predicting Cost...Ch. 5.A - Prob. 9P Ch. 5.A - Prob. 10P

Ch. 5.A - Case 5A-11 Mixed Cost Analysis and the Relevant...Ch. 5.A - CASE 5A-12 Analysis of Mixed Costs in a Pricing...Ch. 5 - Prob. 1Q Ch. 5 - Often the most direct route to a business decision...Ch. 5 - Prob. 3Q Ch. 5 - What is the meaning of operating leverage?Ch. 5 - What is the meaning of break-even point?Ch. 5 - 5-6 In response to a request from your immediate...Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 1AE Ch. 5 - Prob. 2AE Ch. 5 - Prob. 3AE Ch. 5 - Prob. 4AE Ch. 5 - Prob. 5AE Ch. 5 - Prob. 1F15 Ch. 5 - Prob. 2F15 Ch. 5 - Prob. 3F15 Ch. 5 - Prob. 4F15 Ch. 5 - Prob. 5F15 Ch. 5 - Prob. 6F15 Ch. 5 - Prob. 7F15 Ch. 5 - Prob. 8F15 Ch. 5 - Prob. 9F15 Ch. 5 - Prob. 10F15 Ch. 5 - Prob. 11F15 Ch. 5 - Prob. 12F15 Ch. 5 - Prob. 13F15 Ch. 5 - Prob. 14F15 Ch. 5 - Prob. 15F15 Ch. 5 - Prob. 1E Ch. 5 - Prob. 2E Ch. 5 - Prob. 3E Ch. 5 - Prob. 4E Ch. 5 - Prob. 5E Ch. 5 - Prob. 6E Ch. 5 - Prob. 7E Ch. 5 - Prob. 8E Ch. 5 - Prob. 9E Ch. 5 - EXERCISE 5-10 Multiproduct Break-Even Analysis...Ch. 5 - Prob. 11E Ch. 5 - EXERCISE 5-12 Multiproduct Break-Even Analysis...Ch. 5 - EXERCISE 5-13 Changes in Selling Price, Sales...Ch. 5 - Prob. 14E Ch. 5 - Prob. 15E Ch. 5 - Prob. 16E Ch. 5 - Prob. 17E Ch. 5 - Prob. 18E Ch. 5 - Prob. 19P Ch. 5 - PROBLEM 5-20 CVP Applications: Break-Even...Ch. 5 - PROBLEM 5-21 Sales Mix; Multiproduct Break-Even...Ch. 5 - Prob. 22P Ch. 5 - Prob. 23P Ch. 5 - Prob. 24P Ch. 5 - Prob. 25P Ch. 5 - PROBLEM 5-26 CVP Applications; Break-Even...Ch. 5 - Prob. 27P Ch. 5 - Prob. 28P Ch. 5 - Prob. 29P Ch. 5 - Prob. 30P Ch. 5 - PROBLEM 5-31 Interpretive Questions on the CVP...Ch. 5 - Prob. 32C

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