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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
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$2,301.
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$2,373.
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$2,187.
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$2,582.
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$2,508.
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