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Balcom Enterprises is planning to introduce a new product that will sell for $120 a unit. Manufacturing cost estimates for 22,500 units for the first
Balcom Enterprises is planning to introduce a new product that will sell for $120 a unit. Manufacturing cost estimates for 22,500 units for the first year of production are: Direct materials $1,237,500 - Direct labor $855,000 (based on $19 per hour x 45,000 hours) Although overhead has not been estimated for the new product, monthly data for Balcom's total production for the last two years has been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Independent variable Intercept Coefficient on independent variable Coefficient of correlation Factory verhand costs Direct labor hours 5 125,000 S 6.00 0.926 0.824 Based on this information, what is the total overhead cost for an estimated activity level of 50,000 direct labor-hours? $300,000 $425,000 5750,000 5130,000 The cost accountants at the Barkley Company regressed total overhead costs and direct labor hours for the past 30-months and reported the following results Slope Intercept Correlation Coefficient $ 42.17 $619.04 .970 $619.04 What is the estimated overhead cost if 235 direct labor hours are expected to be used in the upcoming period? (rounded to the nearest whole dollar) O $9,272. $10,836. $10,529. $9,910. O
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