Question
The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs.
The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs.
Marchs costs consisted of machine supplies ($153,000), depreciation ($26,500), and plant maintenance ($707,500). These costs exhibit the following respective behavior: variable, fixed, and semivariable.
The manufacturing overhead figures presented in the preceding table do not include Metcalfs supervisory labor cost, which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $71,500. The cost is $143,000 from 15,00029,999 hours and $214,500 when activity reaches 30,000 hours or more.
Required:
1. Determine the machine supplies cost and depreciation for January.
2. Using the high-low method, analyze Metcalfs plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour.
3. Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 28,700 direct-labor hours are worked.
The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs. Manufacturing Direct-Labor Month Overhead Hours January February $689,000 728,000 887,000 751,250 787,500 25,000 27,000 34,000 28,000 32,000 30,000 March April ay June 784,500 March's costs consisted of machine supplies ($153,000), depreciation ($26,500), and plant maintenance ($707,500). These costs exhibit the following respective behavior: variable, fixed, and semivariable. The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost, which is step- fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $71,500. The cost is $143,000 from 15,000- 29,999 hours and $214,500 when activity reaches 30,000 hours or more. Required: 1. Determine the machine supplies cost and depreciation for January. 2. Using the high-low method, analyze Metcalf's plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. 3. Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 28,700 direct-labor hours are worked
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