Question
ABC Company's total overhead costs at various levels of activity are presented below: Machine hoursTotal overhead costs March 60,000$216,800 April 50,000194,000 May 70,000239,600 June 80,000
ABC Company's total overhead costs at various levels of activity are presented below:
Machine hoursTotal overhead costs
March 60,000$216,800
April 50,000194,000
May 70,000239,600
June 80,000 262,400Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance. At the 50,000-machine-hour level of activity, these costs are presented below:
Utilities (V)$54,000
Supervisory salaries (F)62,000
Maintenance (M)78,000
Total overhead costs$194,000
V = Variable; F = Fixed; M = Mixed.
Estimate the total overhead cost at an activity level of 55,000 machine hours, independent of the separate estimates you obtained for its components.
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