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pls do asap Problem 3-15 High-Low Method; Predicting Cost [LO1, LO2] Crosshill Company's total overhead costs at various levels of activity are presented below: Total
pls do asap
Problem 3-15 High-Low Method; Predicting Cost [LO1, LO2] Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Cost Machine-Hours: Month April 70,000 $200, 200 May 60,000 $177,300 June 80,000 $223,100 July 90,000 $246,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable). Supervisory salaries (fixed) Maintenance (mixed) $ 48,000 21,000 108,300 $177,300 Total overhead cost The company 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, first determine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.) Maintenance cost in July $ 153,000 2. Using the high-low method, estimate a cost formula for maintenance. (Round the "Variable cost per unit" to 2 decimal places.) Machine- Hours Maintenance Cost High activity level Low activity level 90,000 $ 153,000 60,000 105,000 Change 30,000 $ 48,000 Variable cost element $ 1.60 per MH Fixed cost element Y= 41,000 3. Express the company's total overhead cost in the form Y= a +bX. (Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine-Hour Fixed Cost Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost $ X 4. What total overhead cost would you expect to be incurred at an activity level of 75,000 machine-hours? (Round the "Variable cost per unit" to 2 decimal places.) Total overhead cost 0.00 $ Step by Step Solution
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