Question
Using the high-low method: 1.Wildcat is now budgeting overhead costs of next year.It expects indirect material costs will increase by 6%, supervisor salaries will be
Using the high-low method:
1.Wildcat is now budgeting overhead costs of next year.It expects indirect material costs will increase by 6%, supervisor salaries will be 5% higher and that the variable portion of maintenance costs will increase by 4%. All other costs will remain at this year's level.What is the expected cost function for next year if the company expects to produce 40,000 units?
Units of Output30,000 Units42,000 Units
Indirect materials$180,000$252,000
Indirect labour1,080,0001,512,000
Supervisors' salaries312,000312,000
Equipment depreciation151,200151,200
Maintenance81,600110,400
Utilities384,000528,000
Total$2,188,800$2,865,600
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started