Adriana Corporation manufactures football 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 1,700 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation?

• Required A
• Required B

Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. (Round "Variable cost" answer to 2 decimal places.)

Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours.

Variable cost (per machine hour) ?

Fixed costs?

Managers expect the plant to operate at a monthly average of 1,700 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation?

Overhead costs?

Month 1 2 3 4 5 6 7 8 9 10 11 12 600 OWNA Labor-Hours 720 725 690 745 790 750 735 735 700 795 670 715 Machine-Hours 1,358 1,402 1,513 1,456 1,585 1,585 1,396 1,301 1,461 1,536 1,290 1,620 Overhead Costs $ 102,780 103,759 109,943 108,249 116,250 114,579 107,051 102,016 106,441 113, 144 100,635 113,835