Assignment

tablets PROBLEM 2-17 High-Low Method; Predicting Cost [LO3, LO4] Echeverria SA is an Argentinian manufacturing company whose total factory overhead costs fluc- tuate somewhat from year to year according to the number of machine-hours worked in its produc- tion facility. These costs (in Argentinian pesos) at high and low levels of activity over recent years are given below Level of Activity Low High 80,000 312,000 pesos 60,000 Total factory overhead costs 274,000 pesos The factory overhead costs above consist of indirect materials, rent, and maintenance. The com- pany has analyzed these costs at the 60,000 machine-hours level of activity as follows: 90,000 pesos Indirect materials (variable) . Rent (fixed) Maintenance (mixed) . ....130,000 54,000 ....274,000 pesos