Yamahonda Motors Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent
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Yamahonda Motors Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine-hours and/or materials costs. To check this, they collected the following data for the past 12 months:
a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours.
b. If the plant is planning to operate at a level of 190 machine-hours next period, what would be the estimated overhead costs? (Assume no inflation.)
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