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The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct- labor hours as its cost driver for
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 Overhead Direct-Labor Month Hours January 31,000 $ 695,000 February 33,000 734,000 March 43,000 893,000 April 34,000 752,750 May June 38,000 36,000 796,500 793,500 March's costs consisted of machine supplies ($219,300), depreciation ($29,500), and plant maintenance ($644,200). 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 $74,500. The cost is $149,000 from 15,000 - 29,999 hours and $223,500 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 29,300 direct-labor hours are worked.
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1 To determine the machine supplies cost and depreciation for January we need to refer to the costs provided in the question The total manufacturing o...Get Instant Access to Expert-Tailored Solutions
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