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Tractor Company needs to prepare pro forma financial statements for the next fiscal year. To do so, the company must forecast its total overhead cost.

Tractor Company needs to prepare pro forma financial statements for the next fiscal year. To do so, the company must forecast its total overhead cost. The actual machine hours and total overhead cost are presented below for the past six months.

Month Total Overhead Machine Hours
January $ 6,320 1,990
February 6,530 2,100
March 6,020 1,750
April 5,590 1,600
May 6,060 1,870
June 6,370 2,020

Using the high-low method, total monthly fixed overhead cost is calculated to be:

Multiple Choice

  • $2,301.

  • $2,373.

  • $2,187.

  • $2,582.

  • $2,508.

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