Berg Industries is in the process of analyzing its manufacturing overhead costs. Berg Industries is not sure if the number of units produced or number of direct labour hours is the best cost driver to use for predicting manufacturing overhead costs. The following information is available:

Requirements
1. Are manufacturing overhead costs fixed, variable, or mixed? Explain.
2. Graph Berg Industries€™ MOH costs against DL hours. Use Excel or graph by hand.
3. Graph Berg Industries€™ MOH costs against units produced. Use Excel or graph by hand.
4. Do the data appear to be sound, or do you see any potential data problems? Explain.
5. Use the high-low method to determine Berg Industries€™ MOH cost equation using DL hours as the cost driver. Assume that management believes that all data are accurate and wants to include all of it in the analysis.
6. Estimate MOH costs if Berg Industries incurs 24,000 DL hours in January.

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MOH Manufacturing Direct МОН Cost Overhead Labour Units Cost per per Unit Month July August. September Hours Produced DL Hour Produced $460,000 23,000 3,600 $20.00 $127.78 515,000 26,400 4,320 19.51 119.21 425,000 19,000 4,200 22.37 101.19 448,000 21,600 3,400 20.74 131.76 91.65 19,400 3,250 22.53 134.46 Costs 527,000 27,000 5,750 437,000 ...5 19.52 December.