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You have recently joined Sunshine Company as an accountant. Re uired: Each uestion is to be considered inde endent . A)You have been given the
You have recently joined Sunshine Company as an accountant. Re uired: Each uestion is to be considered inde endent . A)You have been given the following 6 months information from the Sunshine Company to analyze the overhead costs Se otember 62,400 901 Using the high low method, construct a cost formula for the total quarterly overhead cost. Assume that 8,600 machine hours are budgeted for the coming quarter. Use the formula to calculate the overheads for the coming quarter. (5 marks) B)You have also been given the following information from the Sunshine Company for the month of December 2021: $'000 Beginning raw materials inventory 15,000 Indirect labour 6,000 Direct labour 20,000 Beginning work in process inventory 15,000 Ending work in process inventory 24,000 Ending finished goods inventory 48,000 Purchases of raw materials 70,000 Administrative expenses 6,700 Indirect materials 5,000 Beginning finished goods inventory 30,000 Distribution expenses 7,600 Material handling 4,500 Factory supplies - 3,500 Depreciation of production machines 6,000 Printing of annual report expenses 2,000 Sales revenue 450,000 Ending raw materials inventory 10,000 Prepare the income statement for Sunshine Company for the month of December 2021 .Show all workings clearly. (7 marks) C) Explain to management why would cost behaviour change outside of the relevant range? Give an example
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