Question
Tory Company derived the following cost relationship from a linear analysis of its monthly manufacturing overhead cost. y = $80,000 + $12X where: y =
Tory Company derived the following cost relationship from a linear analysis of its monthly manufacturing overhead cost. y = $80,000 + $12X where: y = monthly manufacturing overhead cost X = machine-hours The standard time required to manufacture one case is four machine-hours. Tory applies its normal annual production is 50,000 cases. 1. Calculate Tory's estimated variable manufacturing overhead cost for a month in which scheduled production is 10,000 cases. (5 marks) 2. Calculate Tory's predetermined fixed manufacturing overhead rate based on its normal annual production cases. (5 marks)
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