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Salter Manufacturing Company produces inventory in a highly automated assembly plant in Fall River, Massachusetts. The automated system is in its first year of operation
Salter Manufacturing Company produces inventory in a highly automated assembly plant in Fall River, Massachusetts. The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes. For the first six months of operations, the following data were collected: Total Machine-hours Kilowatt-hours Overhead Costs January February March April May June 4,560 4,380 4,680 H 3,960 3,900 3,720 L 400 5,424,000 $405,600 5,208,000 404,160 5,400,000 5,148,000 404,160 5,040,000 391,200 4,944,000 407,040H 384,000 L 4,560,000 L 3.000 Required: Use the high-low method to determine the estimating cost function (line equation formula) with machine-hours as the cost driver. a
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