The recent high and low levels of hours operated and monthly repair cost for heavy equipment for
Question:
The recent high and low levels of hours operated and monthly repair cost for heavy equipment for Universal Mfg. are shown below: Hours Operated Repair Cost:
Units Manufacturing overhead
The highest observed level is 24,000 $7,450
The lowest observed level is 21,500 6,700
1. Compute the variable element of repair cost per hour of operation for Universal’s equipment:
a $750
b $3.33
c $0.30
d $0.34
2. Compute the fixed element of Universal’s monthly repair cost:
a. $150.
b. $250.
c. $6,300.
d. $6,450.
3. The total estimated repair cost for a month in which Universal operates equipment for 19,000 hours is:
a $5,950.
b $6,300.
c $6,450.
d $5,700.
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso