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.
MonthDirect-Labor HoursManufacturing OverheadJanuary 30,000 $694,000 February 32,000 733,000 March 42,000 892,000 April 33,000 752,500 May 37,000 795,000 June 35,000 792,000Marchs costs consisted of machine supplies ($210,000), depreciation ($29,000), and plant maintenance ($653,000). 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 $74,000. The cost is $148,000 from 15,00029,999 hours and $222,000 when activity reaches 30,000 hours or more. 1. Determine the machine supplies cost and depreciation for January. (Do not round your intermediate values.)
Machine supplies cost Depreciation2. Using the high-low method, analyze Metcalfs plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. (Round your "Variable cost per hour" answer to 2 decimal places.)
Variable cost per hour Fixed cost per month3. 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 29,200 direct-labor hours are worked.
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