Question

The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period:


a. Use the high-low method to determine:
1. The variable element of manufacturing overhead costs per machine-hour.
2. The fixed element of monthly overhead cost.
b. Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part a to forecast May’s manufacturing overhead costs.
c. Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated thesecosts?


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  • CreatedApril 17, 2014
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