Question
PDX Company derived the following costs relationship from a regression analysis of its monthly manufacturing overhead cost. Y = $100,000 + $12X where: Y =
PDX Company derived the following costs relationship from a regression analysis of its monthly manufacturing overhead cost. Y = $100,000 + $12X where: Y = monthly manufacturing overhead cost and X = machine hours. The standard time required to manufacture one 6-unit case of PDXs single product is 4 machine hours. PDX applies manufacturing overhead to production on the basis of machine-hours, and its normal annual production is 50,000 cases. What would PDXs predetermined fixed manufacturing overhead rate be? Lets now calculate PDXs estimated variable manufacturing overhead cost for a month in which scheduled production is 10,000 cases.
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