Identifying the Parts of the Cost Formula; Calculating Monthly, Quarterly, and Yearly Costs Using a Cost Formula
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Identifying the Parts of the Cost Formula; Calculating Monthly, Quarterly, and Yearly Costs Using a Cost Formula Based on Monthly Data
Gordon Company's controller, Eric Junior, estimated the following formula, based on monthly data, for overhead cost:
Overhead Cost = $208,000 + ($86 x Direct Labor Hours)
1)If next quarter's budgeted direct labor hours equal 85,000, what is the budgeted overhead cost
2)If next year's budgeted direct labor hours equal 425,000, what is the budgeted overhead cost?
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