Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need all the requirements Problem 5A-8 High-Low Method; Predicting Cost (LO5-10) Nova Company's total overhead cost at various levels of activity are presented below:

image text in transcribed

I need all the requirements

Problem 5A-8 High-Low Method; Predicting Cost (LO5-10) Nova Company's total overhead cost at various levels of activity are presented below: 35 points Skipped Month April May June July Machine- Hours 46,000 36,000 56,000 66,000 Total Overhead Cost $ 191,880 $ 169,080 $ 214.680 $ 237,480 eBook Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 36.000 machine-hour level of activity is: Print Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 43,200 67,000 58,880 $169,080 References Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $237,480 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $237,480 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a +bX 3. Express the company's total overhead cost in the form Y = a + bx. 4. What total overhead cost would you expect to be incurred at an activity level of 41,000 machine hours? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Estimate how much of the $237,480 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $237,480 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) (Do not round intermediate calculations.) Maintenance cost in July Required 1 Required 2 >

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_2

Step: 3

blur-text-image_3

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

Public Sector Accounting

Authors: Rowan Jones, Maurice Pendlebury

6th Edition

0273720368, 9780273720362

More Books

Students also viewed these Accounting questions

Question

What courses do your students assist with teaching this semester?

Answered: 1 week ago

Question

2. What are the prospects for these occupations?

Answered: 1 week ago