Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine Hours 52.000 42.000 62.000 72,000 Total

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine Hours 52.000 42.000 62.000 72,000 Total Overhead Cost $ 155, 120 $ 162,520 $ 207,720 $ 230,320 Assume that the total overhead cost above consists of utilities, supervisor salaries, and maintenance. The breakdown of these costs at the 42.000 machine hour level of activity is: unities (variable) Supervisory salaries (fixed) Maintanance (mixed) Total overhead cost 546,200 53,000 0,120 $162,520 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 $230,320 of overhead cost in July was maintenance cost. (Ant to do this. It may be helpful to first determine how much of the $230,320 consisted of utilities and supervisory salories. Think about the behavior of variable and fixed costs) 2. Using the high-low method, estimate a cost formula for maintenance in the form Ybx. 3. Express the company's total overhead cost in the form Ya+bX 4. What total overhead cast would you expect to be incurred at an activity level of 47.000 machine h 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 $230,320 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $230,320 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) (Do not round Intermediate calculations.) Maintenance cost in July K Required 1 Required 2 > Complete this question by entering your answers in the tabs below. 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 rou calculations. Round the "Variable cost per unit" to 2 decimal places.) Y=

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

International Finance A Practical Perspective

Authors: Adrian Buckley

1st Edition

0273731866, 9780273731863

More Books

Students also viewed these Accounting questions

Question

1. Walk to the child, look into his or her eyes.

Answered: 1 week ago

Question

1. List the basic factors determining pay rates.pg 87

Answered: 1 week ago