Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the...
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Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours. machine-hours, or both. The following data were collected from last year's operations. Month Labor-Hours 1 INMISSTARGHE 2 3 5 8 9 10 11 12 715 705 685 745 788 765 740 730 718 795 675 715 Machine-Hours 1,357 1,418 1,529 1,453 1,581 1,583 1,399 1,312 1,463 1,544 1,284 1,612 Overhead Costs $ 102,636 103,890 109,908 108,332 116,184 114,554 186,927 102, 103 106,482 113,016 99,359 111,987 Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average of 1,400 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours. machine-hours, or both. The following data were collected from last year's operations. Month Labor-Hours 1 INMISSTARGHE 2 3 5 8 9 10 11 12 715 705 685 745 788 765 740 730 718 795 675 715 Machine-Hours 1,357 1,418 1,529 1,453 1,581 1,583 1,399 1,312 1,463 1,544 1,284 1,612 Overhead Costs $ 102,636 103,890 109,908 108,332 116,184 114,554 186,927 102, 103 106,482 113,016 99,359 111,987 Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average of 1,400 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation?
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a Using the highlow method to estimate the fixed and variable portions of overhead costs based on machinehours The highlow method involves selecting t... View the full answer
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Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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