Prepare a scattergraph based on the overhead and labor-hour data in Exercise 5-25.

Data from in Exercise 5-25

Lecouvreur Corporation manufactures soccer 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:

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 1,500 machine-hours next year.
What are the estimated monthly overhead costs, assuming no inflation?

Transcribed Image Text:

Month Labor-Hours Machine-Hours Overhead Costs 10 12 123456789012 725 1,355 $102,687 715 1,407 103,792 680 1,520 109,915 740 1,453 108,280 780 1,591 116,229 755 1,579 114,464 740 1,390 107,022 725 1,306 102,094 710 1,454 106,439 795 1,545 113,067 675 1,298 100,755 710 1,604 112,842