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 = $271,000 + ($72 x Direct Labor Hours)

Required:

1. Select the term in the right column that corresponds to the term in the left column.

Overhead cost	Dependent variableFixed cost (intercept)Independent variableVariable rate (slope)
$271,000	Dependent variableFixed cost (intercept)Independent variableVariable rate (slope)
$72	Dependent variableFixed cost (intercept)Independent variableVariable rate (slope)
Direct labor hours	Dependent variableFixed cost (intercept)Independent variableVariable rate (slope)

2. If next month's budgeted direct labor hours equal 16,000, what is the budgeted overhead cost? $fill in the blank 5

3. If next quarter's budgeted direct labor hours equal 48,000, what is the budgeted overhead cost? $fill in the blank 6

4. If next year's budgeted direct labor hours equal 240,000, what is the budgeted overhead cost? $fill in the blank 7