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Carmichael Industries is in the process of analyzing its manufacturing overhead costs. Carmichael Industries is not sure if the number of units produced or the

Carmichael Industries is in the process of analyzing its manufacturing overhead costs. Carmichael Industries is not sure if the number of units produced or the number of direct labor (DL) hours is the best cost driver to be used for predicting manufacturing overhead (MOH) costs.

The following information is available:

Month

Manufacturing Overhead Cost

Direct Labor Cost

Units Produced

MOH Cost per DCL Hour

MOH Cost per Unit Produced

July

$463,000

23,100

3,620

$20.04

$127.90

August

513,000

26,500

4,300

19.36

119.30

September

435,000

20,000

4,230

21.75

102.84

October

450,000

21,400

3,380

21.03

133.14

November

562,000

30,000

5,790

18.73

97.06

December

438,000

20,500

3,300

21.37

132.73

Here is the list of tasks that you need to do in this assessment:

1. Are manufacturing overhead costs fixed, variable, or mixed? Explain.

2. Graph Carmichael Industries

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