Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner...
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Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours 1 $ 2,630 1,503 2 2,675 1,600 3 2,725 1,615 4 2,825 1,665 5 2,860 1,785 6 3,010 1,885 7 2,870 1,795 8 2,910 1,815 9 2,785 1,705 10 2,575 1,415 11 12 2,595 2,895 1,560 1,430 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollar.) Maintenance cost 1,265 + Answer is complete and correct. 0.9255 M = Machine Hours Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours 1 $ 2,630 1,503 2 2,675 1,600 3 2,725 1,615 4 2,825 1,665 5 2,860 1,785 6 3,010 1,885 7 2,870 1,795 8 2,910 1,815 9 2,785 1,705 10 2,575 1,415 11 12 2,595 2,895 1,560 1,430 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollar.) Maintenance cost 1,265 + Answer is complete and correct. 0.9255 M = Machine Hours
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Cost Management A Strategic Emphasis
ISBN: 9781259917028
8th Edition
Authors: Edward Blocher, David F. Stout, Paul Juras, Steven Smith
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