Question 9 options:

Entry Rules:

Round your answers to the nearest PENNY (2 decimal places).

Use your rounded answer in ALL subsequent calculations.

Examples:

If your answer is $24,500.4746, enter 24500.47

If your answer is $24,500.4753, enter 24500.48

If your answer is $24,500.0012, enter 24500.00

Never enter $ or , when inputting numerical answers

QUESTION:

Thomas Ltd., a manufacturing firm, manufactures plastic frames. The company has supplied information from its accounting records for the last year.

	No. of	Factory
Month	Frames	Overhead
Jan	5,000	$9,000
Feb	7,000	$13,000
Mar	5,800	$9,600
Apr	4,800	$9,100
May	5,300	$9,400
Jun	4,500	$7,900
Jul	4,400	$8,600
Aug	6,000	$10,800
Sep	5,500	$10,800
Oct	5,600	$10,100
Nov	6,500	$13,100
Dec	5,400	$9,200

Part 1:

Using the high low method, what is the variable factory overhead per frame?

Using the rounded answer which you just input (above), what is the fixed cost for factory overhead?

Part 2:

If the company increases their production of frames by 60% in any given month, would the factory overhead cost per frame increase, decrease, or stay the same?

Enter the number 1 if it would increase.

Enter the number 2 if it would decrease.

Enter the number 3 if it would stay the same.

Part 3:

ASSUME the total cost of factory overhead equals $1,000 + (1.75 * number of frames manufactured).

What would total cost equal if the company manufacturers 5,500 frames?

Part 4:

If the total cost of factory overhead equals $11,000 and the company manufacturers 5,500 frames, what is the total factory overhead cost per frame manufactured?