Jasper, Inc., uses machine-hours to apply factory overhead with an operating range between 1,000 and 6,000 hours per month. A normal capacity of 4,000 hours will be used for applying factory overhead. Fixed costs per month amount to $24,000 while the strictly variable factory overhead costs total $3 per hour. In addition, semivariable factory overhead cost for 6,000 machine-hours total $32,000, while those for 1,000 hours are budgeted to be $20,000.

Required:

a. Separate the semivariable costs into their fixed and variable components using the high-low method.

b. Compute the fixed and variable factory overhead application rates.

c. Determine spending and volume variances for a month in which 5,000 hours were worked and actual factory overhead totaled $70,400. Prove your answer.

d. Calculate a bid price for a customer who approached you during the month when machine-hour capacity was 5,000. How much should be allowed for factory overhead if this special order requires 250 machine-hours?