Dallus wants to examine the behaviour of maintenance costs for budgeting purpose. The following data on...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dallus wants to examine the behaviour of maintenance costs for budgeting purpose. The following data on machine hours worked and maintenance costs for the past year are collected: Month January February March April May June July August September October November December Machine Hours 18,000 15,000 12,750 21,000 11,880 14,500 19,000 14,880 10,000 13,360 16,600 18,800 Maintenance Cost $20,600 18,900 15,100 22,010 13,200 19,500 25,000 19,874 12,000 15,500 19,800 13,500 Required: a. Use the high-low method to estimate the variable cost per machine hour and the fixed cost per month. (7 marks) (9 marks) b. Plot and comment on the estimated cost function. c. Develop a formula to express the cost behaviour of ABC's maintenance costs. (2 marks) d. According to the budget, the machine is expected to work 200,000 hours next year. How much is the budgeted maintenance costs? (2 marks) Dallus wants to examine the behaviour of maintenance costs for budgeting purpose. The following data on machine hours worked and maintenance costs for the past year are collected: Month January February March April May June July August September October November December Machine Hours 18,000 15,000 12,750 21,000 11,880 14,500 19,000 14,880 10,000 13,360 16,600 18,800 Maintenance Cost $20,600 18,900 15,100 22,010 13,200 19,500 25,000 19,874 12,000 15,500 19,800 13,500 Required: a. Use the high-low method to estimate the variable cost per machine hour and the fixed cost per month. (7 marks) (9 marks) b. Plot and comment on the estimated cost function. c. Develop a formula to express the cost behaviour of ABC's maintenance costs. (2 marks) d. According to the budget, the machine is expected to work 200,000 hours next year. How much is the budgeted maintenance costs? (2 marks)
Expert Answer:
Answer rating: 100% (QA)
a To estimate the variable cost per machine hour and the fixed cost per month using the highlow method we first identify the highest and lowest levels ... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
Posted Date:
Students also viewed these accounting questions
-
You think XYZ stock has potential for an upward move in price. You have no position whatsoever in the stock now. You would like to take the opportunity of any up movement in price but want to...
-
Complete the following statements: The differential equation u' (t) + u(t) sint=1 is of Click for List The differential equation u' (t) + u(t) u(t)= cost is of Click for List The differential...
-
Develop a four-month moving average forecast for Wallace Garden Supply and compute the MAD. A three-month moving average forecast was developed in the section on moving averages in Table5.3. MONTH...
-
Consider the following graph. 2 7 6 C 10 10 H 11 E 12 15 14 (a). Find a minimum spanning tree of the graph using Kruskal's algorithm. List the edges in the order they are put into the tree. (b)....
-
Making a Decision as a Bank Loan Officer: Analyzing and Restating Financial Statements That Have Major Deficiencies (A Challenging Case) Julio Estela started and operated a small boat repair service...
-
Several factors affect the workings of the kidneys. For example, Figure P4.14 shows how a step change in arterial flow pressure affects renal blood flow in rats. In the hot tail part of the...
-
What are three advantages of online brainstorming?
-
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2008 for $2,560,000. Its useful life was...
-
Danner Company expects to have a cash balance of $45,000 on January 1, 2022. Relevant monthly budget data for the first 2 months of 2022 are as follows. Collections from customers: January $85,000,...
-
McGee Carpet and Trim installs carpet in commercial offices. Andrea McGee has been very concerned with the amount of time it took to complete several recent jobs. Some of her workers are very...
-
Coke cola What were some of the big changes? What drove these changes you will likely need to look through their earnings release to find out more. Some drivers of changes in revenue can include:...
-
DVMS Power Electronics Private Limited: Capacity Analysis Basing it on the case mentioned above, kindly answer the following questions: 1.) What are the issues? 2.) What are the internal and external...
-
You have now seen three different examples of Theory of Change Why is it useful to have different definitions of a Theory of Change? Would it be useful to have a common definition of a Theory of...
-
Malcolm, a relatively new manager, has handed in his performance evaluations. The HR Manager notices that most of his employees have received 3 out of 5 on the rating scale, which is 'Satisfactory"....
-
Use the following project status information to calculate each of the requested EVM numbers below. The project status is reported at the end of week 13. Task A B C D E F Budget Cost $5,000 $8,500...
-
Which retail philosophy directly focuses on maintaining long-term bonds with past customers?
-
Petronet sells merchandise to its 80-percent-owned subsidiary Sonata at a markup of 25 percent on cost. During 2017, Petronet charges Sonata $5,000,000 for merchandise sales. Sonata's 2017 beginning...
-
A red card is illuminated by red light. What color will the card appear? What if its illuminated by blue light?
-
Consider the following selected cost data for KYM Inc. for 2013. Budgeted manufacturing overhead (MOH).........$4,180,000 Budgeted machine hours (MH)............ 190,000 Actual manufacturing overhead...
-
Conglomerates has not yet told Sam Pilon what the total amount of funds available for capital projects at Firthing Manufacturing will be, except for the after-tax required rate of return being 12%....
-
Roundtree Chocolates manufactures and distributes chocolate products. It purchases cocoa beans and processes them into two intermediate products: Chocolate powder liquor base. Milk chocolate liquor...
-
The property of a system depends upon its state. State True (T) or False (F)
-
In a control volume, mass, momentum and energy may flow. State True (T) or False (F)
-
Temperature is an intensive property. State True (T) or False (F)
Study smarter with the SolutionInn App