Question
The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period. Month Machine-Hours Manufacturing Overhead January 5,600
The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period.
Month Machine-Hours Manufacturing Overhead
January 5,600 $300,000
February 3,200 $224,000
March 4,900 $263,800
April 2,900 $190,000
a-1.Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour.(Round your answer to 2 decimal places.)
a-2.Use the high-low method to determine the fixed element of monthly overhead cost.
b.Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in partato forecast May's manufacturing overhead costs.
c.Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated these costs?
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