Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the...
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Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations. Month Labor-Hours Machine-Hours Overhead Costs 1 715 1,351 2 720 1,401 $ 102,680 103,867 3 675 1,524 109,949 735 1,452 108,250 780 1,596 116,198 750 1,569 114,450 745 1,397 107,068 725 1,319 102,130 700 1,461 106,464 800 1,535 113,066 11 665 1,294 99,863 12 705 1,614 112,503 Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average of 1,400 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? Complete this question by entering your answers in the tabs below. Required A Required B Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. (Round "Variable cost" answer to 2 decimal places.) Variable cost (per machine hour) Fixed cost 4 5 Complete this question by entering your answers in the tabs below. Required A Required B Managers expect the plant to operate at a monthly average of 1,400 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? Overhead costs <Required A Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations. Month Labor-Hours Machine-Hours Overhead Costs 1 715 1,351 2 720 1,401 $ 102,680 103,867 3 675 1,524 109,949 735 1,452 108,250 780 1,596 116,198 750 1,569 114,450 745 1,397 107,068 725 1,319 102,130 700 1,461 106,464 800 1,535 113,066 11 665 1,294 99,863 12 705 1,614 112,503 Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average of 1,400 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? Complete this question by entering your answers in the tabs below. Required A Required B Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. (Round "Variable cost" answer to 2 decimal places.) Variable cost (per machine hour) Fixed cost 4 5 Complete this question by entering your answers in the tabs below. Required A Required B Managers expect the plant to operate at a monthly average of 1,400 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? Overhead costs <Required A
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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