These costs profile for the quarter ending 30 September is presented below: Machine-hours Total factory overhead...
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These costs profile for the quarter ending 30 September is presented below: Machine-hours Total factory overhead costs July 20,000 $6,750,000 Level of Activity August 40,000 $9,610,000 September 60,000 $12,470,000 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 20,000 machine-hours level of activity as follows: Indirect materials ($100/machine-hour) Rent (fixed)........ Maintenance (mixed.).............. For planning purpose, the company wants to analyze the maintenance cost into its variable and fixed cost elements. ..........$3,000,000 .............$1,750,000 A) For the manufacturing business, you are required to: i) Using the high-low method, estimate a cost formula for the maintenance cost (5 marks) Predict the total factory overheads cost for October, November, and December at 80,000, 100,000 and 120,000 activity levels respectively. (10 marks) ii) These costs profile for the quarter ending 30 September is presented below: Machine-hours Total factory overhead costs July 20,000 $6,750,000 Level of Activity August 40,000 $9,610,000 September 60,000 $12,470,000 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 20,000 machine-hours level of activity as follows: Indirect materials ($100/machine-hour) Rent (fixed)........ Maintenance (mixed.).............. For planning purpose, the company wants to analyze the maintenance cost into its variable and fixed cost elements. ..........$3,000,000 .............$1,750,000 A) For the manufacturing business, you are required to: i) Using the high-low method, estimate a cost formula for the maintenance cost (5 marks) Predict the total factory overheads cost for October, November, and December at 80,000, 100,000 and 120,000 activity levels respectively. (10 marks) ii)
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I Main tenance Cost 1 750 000 100 machine hour 20 000 1 750 000 2 000 000 3 750 000 ii Total Factory ... View the full answer
Related Book For
Discrete Mathematics and Its Applications
ISBN: 978-0073383095
7th edition
Authors: Kenneth H. Rosen
Posted Date:
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