Amfac Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the
Question:
Amfac Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the following information has been extracted:
The company?s manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month.
Required:
1. For both March and June, determine the amount of manufacturing overhead cost added to production.
2. By means of the high?low method of cost analysis, estimate a cost formula for manufacturing overhead. Express the variable portion of the formula in terms of a variable rate per unit of product.
3. If 7,000 units are produced during a month, what will be the cost of goods manufactured? (Assume that work-in-process inventories do not change for the month.)
Step by Step Answer:
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan