Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Month April Machine- Hours 70,000 60,000 80,000 90,000 Total Overhead Cost $198.000 $174,000 $ 222,000 $ 246.000 May June July Assume that the total overhead

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Month April Machine- Hours 70,000 60,000 80,000 90,000 Total Overhead Cost $198.000 $174,000 $ 222,000 $ 246.000 May June July Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000 machine-hour level of activity is: Utilities variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 48,000 21,000 105,000 $174,000 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 $246,000 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $246,000 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 75,000 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 $246,000 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) (Do not round your inter nediate calculations.) Maintenance cost in July Required Required 2 > Required 1 Required 2 Required 3 Required 4 Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bx. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) ( Required 1 Required 3 > Required 1 Required 2 Required Required 4 Express the company's total overhead cost in the form Y = "Variable cost per unit" to 2 decimal places.) +bX. (Do not round your intermediate calculations. Round the Variable Cost per Machine Fixed Cost Hour Utilities cost Supervisory salarios cost Maintenance cost Total overhead cost S 0.00 S 0 Required 1 Required 2 Required 3 Required 4 What total overhead cost would you expect to be incurred at an activity level of 75,000 machine-hours? (Do not round your intermediate calculations.) Total overhead cost

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

Step: 3

blur-text-image

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

Financial Accounting Version 3.0

Authors: Leah Kratz, Joe Ben Hoyle, C. J. Skender

3rd Edition

1453392904, 9781453392904

More Books

Students also viewed these Accounting questions