Using the high-low points method for indirect labor costs at different levels of activity. The following data involve the direct labor hours worked and indirect labor costs for the Mixing Department of the Glenwood Company for each quarter of -19X1.

Instructions 1. Using the high-low points method, compute the variable rate per direct labor hour and the fixed cost per month for indirect labor. Show your computations.
2. In the first quarter of 19X2, 12,800 direct labor hours were worked in the Mixing Department. Compute the expected indirect labor costs for the quarter.
3. In the first quarter of 19X2, the indirect labor costs in the Mixing Department were $27,100. Does this show that indirect labor costs were well controlled? |
Explain.

Direct Indirect Labor Hours Labor Costs First Quarter 10,400 $23,460 Second Quarter 12.100 25,100 Third Quarter 9,200 22,200 Fourth Quarter 10,700 23.780