Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following is the total overhead cost at various levels of activity for McRoy Company: February March April May Direct Labour Hours Total Overhead Cost

The following is the total overhead cost at various levels of activity for McRoy Company: February March April May Direct Labour Hours Total Overhead Cost 80,000 $222,000 90,000 $246,000 70,000 $198,000 60,000 $174,000 The total overhead cost above consists of utilities, rent and maintenance. The breakdown of these costs at the 60,000 direct labour hour level of activity is: Required: Utilities (variable) Rent (fixed) Maintenance (Mixed) Total overhead cost $48,000 $21,000 $105,000 $174,000 McRoy Company wants to separate the maintenance cost into its variable and fixed components. (a) Estimate how much of the $246,000 of overhead cost in March was maintenance cost. (4 marks) (b) Using the high low method, construct a cost formula for the maintenance cost. (3 marks) (c) Assume that 209,000 direct labour hours are budgeted for the third quarter of the year, what would be the total overhead cost for the quarter? (5 marks)
image text in transcribed
The following is the total overhead cost at various levels of activity for McRoy Company: The total overhead cost above consists of utilities, rent and maintenance. The breakdown of these costs at the 60,000 direct labour hour level of activity is: McRoy Company wants to separate the maintenance cost into its variable and fixed components. Required: (a) Estimate how much of the $246,000 of overhead cost in March was maintenance cost. (4 marks) (b) Using the high low method, construct a cost formula for the maintenance cost. (3 marks) (c) Assume that 209,000 direct labour hours are budgeted for the third quarter of the year, what would be the total overhead cost for the quarter

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Define Management by exception

Answered: 1 week ago

Question

Explain the importance of staffing in business organisations

Answered: 1 week ago

Question

What are the types of forms of communication ?

Answered: 1 week ago

Question

2. Describe why we form relationships

Answered: 1 week ago

Question

5. Outline the predictable stages of most relationships

Answered: 1 week ago