Threaded case #7

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The threaded case for this week is:

Shook

The following selected data were taken from the accounting records of Shook Industrial Manufacturing:

Month Machine Hours Manufacturing Overhead

May 46,000 $889,000

June 60,000 1,130,000

July 68,000 1,274,000

August 52,000 980,000

July's costs consisted of machine supplies ($170,000), property taxes ($24,000), and plant maintenance ($1,080,000). These costs exhibit the following respective behavior: variable, fixed, and semi-variable (mixed).

Required:

1. Determine the machine supplies and property taxes for May

2. By using the high-low method, analyze Shook's plant maintenance costs and calculate the monthly fixed portion and the variable cost per machine hour.

3. Assume the present cost behavior patterns continue into future months. Estimate the total amount of manufacturing overhead the company can expect in September if 56,000 machine hours are worked.