Question
Gamecock Industries is in the process of analyzing its manufacturing overhead costs. Gamecock Industries is not sure if the number of units produced or
Gamecock Industries is in the process of analyzing its manufacturing overhead costs. Gamecock Industries is not sure if the number of units produced or the number of direct labor (DL) hours is the best cost driver to use for predicting manufacturing overhead (MOH) costs. The following information is available: Month MOH Costs DL Hours Units Produced MOH Cost per DL Hour MOH Cost July $470,000 22,800 3,630 $20.61 per Unit $129.48 August $558,000 26,200 4,340 $19.73 $119.12 September $428,000 19,000 4,190 $22.53 $102.15 October $453,000 21,800 3,420 $20.78 $132.46 November December $557,000 29,000 5,770 $19.21 $96.53 $423,000 19,500 3,260 $22.51 $134.66 1. Use the high-low method to determine Gamecock Industries' manufacturing overhead cost equation using DL Hours as the cost driver. Assume that management believes all the data to be accurate and wants to include all of it in the analysis. a. What is the variable cost associated with the cost function (2 Points)? sing di b. What is the fixed cost associated with the cost function (2 Points)? decimal faith c. Estimate manufacturing overhead costs if Gamecock Industries incurs 23,000 DL hours in January (1 Points). ent of the regress
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