High-low method

The following information is available regarding the total manufacturing overhead costs of Paymore, Inc., for five months in 2012: (a) Using the high-low method, compute the following:

(1) The variable element of overhead cost per machine-hour: $____________________ per machine-hour

(2) The fixed element of monthly overhead cost: $__________________

(b) Use the cost relationship determined in part a to estimate the total manufacturing overhead costs for July 2012, given that 7,250 machine-hours are scheduled. $___________________

Machine Mfg Februa March April Mav Hours Overhead Costs 6,900 5,000 6,300 9,333 6,833 S6,250 $5,375 $6,025 $7,975 $6,050 une