Data P2 Part II-3:
Amfac Company manufactures a single product. The company keeps careful records of
manufacturing activities from which the following information has been extracted:
AMFAC COMPANY
	Level of Activity
	March-Low	June-High
Number of units produced	6,000	9,000
Cost of goods manufactured	$168,000	$257,000
Work in process inventory, beginning	$9,000	$32,000
Work in process inventory, ending	$15,000	$21,000
Direct materials cost per unit	$6	$6
Direct labor cost per unit	$10	$10
Manufacturing overhead cost, total	?	?
Part 3 information:
Units produced during month	7,000
No change in Work in Process inventory
The company's manufacturing overhead cost consists of both variable and fixed cost elements.
To have data available for planning, management wants to determine how much of the overhead
cost is variable with units produced and how much of it is fixed per month.
Required:
1. For both March and June, estimate the amount of manufacturing overhead cost added to
production. The company had no under-or overapplied overhead in either month.
Hint: A useful way to proceed might be to construct a schedule of cost of goods manufactured.
2. Using the high-low method, estimate a cost formula for manufacturing overhead. Express the
variable portion of the formula in terms of a variable rate per unit of product.
3. If 7,000 units are produced during a month, what would be the cost of goods manufactured?
Assume that work in process inventories do not change and that there is no under-or overapplied
overhead cost for the month.