Question
C- Management of Farah Corporation has asked your help as an intern in preparing some key reports for April. Direct materials cost was $30,000, manufacturing
C- Management of Farah Corporation has asked your help as an intern in preparing some key reports for April. Direct materials cost was $30,000, manufacturing overhead costs for the month was $54,000, and direct labor was 60% of conversion cost.
Required: Calculate direct labor cost and prime cost.
D-ABC Company gathered the following information for the last six months:
Month Electricity Cost Machine Hours
January $48,800 27,800
February 60,600 35,200
March 58,000 33,600
April 44,680 26,400
May 39,800 23,200
June 29,800 13,200
Required:
Using the high-low method, answer the following questions (show computations to support your answers).
(1) Calculate the estimated variable portion of electricity costs per machine hour?
(2) Calculate the estimated fixed Electricity cost each month?
(3) If it is estimated that 10,000 machine hours will be run in July, what is the expected total Electricity cost for July?
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