Table 4 gives you the information for the last two months on the overhead cost.Use this information to determine the fixed and variable portions of the cost.(You will need this information to complete Table 5). Machine hours have been determined as the best cost driver for separating mixed cost into their fixed and variable portions. It takes approximately 10 minutes of total machine time for each cereal box (or 1/6 a machine hour per box of cereal).

Table 4 - Actual Overhead cost for the last two months

Month 1 Month 2 Indirect Material $755 $755

Indirect Labor 5,000 5,000 Machine Maintenance 338 410

Electricity 504 630 Depreciation 530 530 Quality testing 428 500

Machine Hours *1,200 1,500

*10 minutes of machine time per box of cereal (1/6 hour = 1 unit)

Do all your calculations here:

Machine maintenance

Electricity

Quality testing