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The Feline Company has been having some difficulties estimating its manufacturing overhead costs. In the past, manufacturing overhead costs have been related to production levels.
The Feline Company has been having some difficulties estimating its manufacturing overhead costs. In the past, manufacturing overhead costs have been related to production levels. However, some production managers have indicated that the size of their production lots might also be having an impact on the amount of their monthly manufacturing overhead costs. In order to investigate this possibility, the company collected information on its monthly manufacturing overhead costs, production in units, and average production lot size for 2020. Average Monthly Production Lot Size Month HNM too Production (Units) 75,000 90,000 65,000 80,000 55,000 50,000 85,000 105,000 102,000 68,000 75,000 95,000 Manufacturing Overhead Cost $ 925,800 843,875 910,125 946,000 879,000 825,000 960,000 1,053,500 1,020,000 905,000 938,000 995,000 11 Required: (a.) Use the high-low method to estimate next month's manufacturing overhead costs, assuming the company is planning to produce 92,000 units. (b.) Use the high-low method to estimate next month's manufacturing overhead costs, assuming the company is planning to run a 21-lot size
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