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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
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. Month Labor-Hours Machine-Hours 1 725 1,354 2. 720 1,423 3 698 1,513 4. 750 1,445 5 775 1,584 6 765 1,583 7 735 1,385 8 720 1.306 9 720 1.462 19 880 1,544 11 670 1,284 12 722 1,614 Overhead Costs $ 102,784 103,721 109,979 108, 2e2 116,259 114.473 1e7.01 122.199 106,315 113,091 102.833 116,693 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? Complete this question by entering your answers in the tabs below. 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.) Variable cost (per machine hour) Fixed cost Required A Required B >
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