Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Crosshill Company's total overhead costs at various levels of activity are presented below Month April June July May Machine Hours 46,00 36.ece 56,00 66,00 Total

image text in transcribed
image text in transcribed
image text in transcribed
Crosshill Company's total overhead costs at various levels of activity are presented below Month April June July May Machine Hours 46,00 36.ece 56,00 66,00 Total Overhead Cost $187,90 $165,400 $210,400 $232.900 Assume that the overhead cost above consists of utilities, supervisory sales, and maintenance. The breakdown of these costs at the 36,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed Maintenance mixed) Total overhead cost 39,600 65,800 60,800 $ 165,400 The company wants to break down the maintenance cost into its variable and fixed cost elements Required: 1. Estimate how much of the $232.900 of overhead cost in July was maintenance cost. (Hint To do this, first determine how much of the $232,900 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range) (Do not round Intermediate calculations.) Maintenance cool in July 2. Using the high-low method, estimate a cost formula for maintenance. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Machine- Hours Maintenance Cost High activity level Low activity level Change Variable cost element Fixed cost element per MH Y 3. Express the company's total overhead cost in the form Y = a + bx. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine-Hour Fixed Cost Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost 04.4021 3. Express the company's total overhead cost in the form Ya+bX (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine-Hour ook Fixed Cost Uttes cost Supervisory salaries cost Maintenance cost Total overhead cost ces 4. What total overhead cost would you expect to be incurred at an activity level of 41,000 machine-hours? (Do not round intermediate calculations.) Total overhead cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Wall Street Mba Your Personal Crash Course In Corporate Finance

Authors: Reuben Advani

3rd Edition

1260135594, 9781260135596

More Books

Students also viewed these Accounting questions

Question

How to Calculate the Regression Line

Answered: 1 week ago

Question

=+ Where, how, why, and when are the products to be bought abroad?

Answered: 1 week ago