Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Academy Products manufactures a variety of custom components for use in aircraft navigation and communications systems. The controller has asked for your help in estimating

image text in transcribedAcademy Products manufactures a variety of custom components for use in aircraft navigation and communications systems. The controller has asked for your help in estimating fixed and variable overhead costs for Academys Rio Puerco plant. The controller tells you that the best cost driver for estimating overhead is machine-hours. Monthly data on machine-hours and overhead costs for the last year have been collected and are shown below: Month Machine-Hours Overhead Costs 1 630,000 $ 660,000 2 900,000 2,170,000 3 765,000 1,220,000 4 665,000 780,000 5 1,035,000 3,700,000 6 800,000 1,400,000 7 750,000 1,100,000 8 815,000 1,500,000 9 935,000 2,500,000 10 680,000 840,000 11 715,000 980,000 12 700,000 910,000 Required: a. Estimate the monthly fixed costs and the unit variable cost per machine-hour using the high-low estimation method. (Round variable cost per unit to 4 decimal places.) b. Draw a scattergraph relating overhead costs to the number of machine-hours. Instructions: 1. On the graph below, use the point tool to plot the point corresponding to the machine-hours and relating overhead costs (Month 1). 2. Repeat the process for the remainder of the sample (Month 2, Month 3, ). 3. To enter exact coordinates, double click on the point and enter the exact co-ordinates of x and y.

Academy Products manufactures a variety of custom components for use in aircraft navigation and communications systems. The controller has asked for your help in estimating fixed and variable overhead costs for Academy's Rio Puerco plant. The controller tells you that the best cost driver for estimating overhead is machine-hours Monthly data on machine-hours and overhead costs for the last year have been collected and are shown below: Month NOWN- Machine-Hours 630,000 900.000 765,000 665,000 1,035,000 800,000 750,000 815,000 935,000 680,000 715,000 700,000 Overhead Costs $ 660,000 2,170,000 1,220,000 780,000 3,700,000 1,400,000 1,100,000 1,500,000 2,500,000 840,000 980,000 910,000 Required: a. Estimate the monthly fixed costs and the unit variable cost per machine-hour using the high-low estimation method. (Round variable cost per unit to 4 decimal places.) Overhead Costs = per MH Machine hour b. Draw a scattergraph relating overhead costs to the number of machine-hours Instructions: 1. On the graph below, use the point tool to plot the point corresponding to the machine-hours and relating overhead costs (Month 1). 2. Repeat the process for the remainder of the sample (Month 2, Month 3, ... ). 3. To enter exact coordinates, double click on the point and enter the exact co-ordinates of x and y. High-Low Method, Scattergraph Academy Products Month 1 4100000 Month 2 3600000 3100000 Month 3 2600000 Month 4 Overhead Costs 2100000 Month 5 1600000 1100000- Month 6 800000 A 850000 7500000 8500000,950098.1050099 Academy Products manufactures a variety of custom components for use in aircraft navigation and communications systems. The controller has asked for your help in estimating fixed and variable overhead costs for Academy's Rio Puerco plant. The controller tells you that the best cost driver for estimating overhead is machine-hours Monthly data on machine-hours and overhead costs for the last year have been collected and are shown below: Month NOWN- Machine-Hours 630,000 900.000 765,000 665,000 1,035,000 800,000 750,000 815,000 935,000 680,000 715,000 700,000 Overhead Costs $ 660,000 2,170,000 1,220,000 780,000 3,700,000 1,400,000 1,100,000 1,500,000 2,500,000 840,000 980,000 910,000 Required: a. Estimate the monthly fixed costs and the unit variable cost per machine-hour using the high-low estimation method. (Round variable cost per unit to 4 decimal places.) Overhead Costs = per MH Machine hour b. Draw a scattergraph relating overhead costs to the number of machine-hours Instructions: 1. On the graph below, use the point tool to plot the point corresponding to the machine-hours and relating overhead costs (Month 1). 2. Repeat the process for the remainder of the sample (Month 2, Month 3, ... ). 3. To enter exact coordinates, double click on the point and enter the exact co-ordinates of x and y. High-Low Method, Scattergraph Academy Products Month 1 4100000 Month 2 3600000 3100000 Month 3 2600000 Month 4 Overhead Costs 2100000 Month 5 1600000 1100000- Month 6 800000 A 850000 7500000 8500000,950098.1050099

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Quickstudy Reference Tool

Authors: Michael P Griffin

1st Edition

1423236408, 978-1423236405

More Books

Students also viewed these Accounting questions

Question

an element of formality in the workplace between different levels;

Answered: 1 week ago