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Exercise 5-36 (Algo) Methods of Estimating Costs: High-Low (LO 5-4) Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand
Exercise 5-36 (Algo) Methods of Estimating Costs: High-Low (LO 5-4) Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations. Month Labor-Hours Machine-Bours 1.365 1.415 1,512 1.450 1.599 Overhead Cost $ 102,655 103,895 109.874 108,269 116,192 114,504 107,089 102146 106.374 113,112 101.841 114.639 1, 391 1,309 1,448 1,565 1,60B Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average of 1.400 machine hours next year What are the estimated monthly overhead costs, assuming no inflation? Complete this question by entering your answers in the tabs below. Required Reguired Use the Nigh anb t hod to estimate the fixed and variable portion of overhead costs asid on mach wer 2 decimal pocet, h
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