Question
The J. Page Furniture Company has the following information available regarding costs at various levels of monthly production: Production volume (units) 16,000 Units 22,000 Units
The J. Page Furniture Company has the following information available regarding costs at various levels of monthly production:
Production volume (units) | 16,000 Units | 22,000 Units |
Direct materials | $70,000 | $100,000 |
Direct labor | 66,000 | 90,000 |
Indirect materials | 21,000 | 30,000 |
Supervisors salaries | 12,000 | 12,000 |
Depreciation on plant and equipment | 10,000 | 10,000 |
Maintenance | 32,000 | 44,000 |
Utilities | 15,000 | 21,000 |
Insurance on plant and equipment | 1,600 | 1,600 |
Property taxes on plant and equipment | 2,000 | 2,000 |
Total | $229,600 | $310,600 |
Develop an equation for total monthly production costs using the high-low method of cost estimation, and predict total costs for a monthly production volume of 18,000 units.
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