Mary Ellis owns a small manufacturing company and would like to develop more accurate estimates for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mary Ellis owns a small manufacturing company and would like to develop more accurate estimates for overhead expenses when making planning decisions. She is pretty sure that overhead is a mixed cost that varies with direct labour-hours but she would like to do a proper analysis to determine the variable and fixed components. She collected the following information for the past 12 months on direct labour-hours incurred and total overhead expenses. Direct Labour-Hours Month January 1,500 Total Overhead Costs $44,000 February 1,680 $47,200 March 1,800 $ 48,000 April 2,520 $ 51,200 May 2,700 $53,600 June 3,300 $ 56,800 July 3,900 $ 59,200 August 4,500 $ 61,600 September 4,200 $ 60,000 October 2,700 $ 54,400 November 1,860 $ 49,600 December 3,900 $ 58,400 Required: 1. Using the least-squares regression method, estimate the variable overhead cost per direct labour-hour and the total fixed overhead cost per month. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per direct labour-hour to 2 decimal places.) Variable overhead cost per direct labour-hour Total fixed cost per month 2. Express the cost data derived in part 1 above in the form Y= a + bX. (Round Fixed cost to the nearest whole dollar amount and the Variable cost to 2 decimal places.) Y = + 3. Using the cost formula stated in part 2, estimate total overhead costs for a month where direct labour-hours are expected to be 3,900. (Round your Variable cost per direct labor hour to 2 decimal places and round your final answer to the nearest whole dollar amount.) Total overhead costs Mary Ellis owns a small manufacturing company and would like to develop more accurate estimates for overhead expenses when making planning decisions. She is pretty sure that overhead is a mixed cost that varies with direct labour-hours but she would like to do a proper analysis to determine the variable and fixed components. She collected the following information for the past 12 months on direct labour-hours incurred and total overhead expenses. Direct Labour-Hours Month January 1,500 Total Overhead Costs $44,000 February 1,680 $47,200 March 1,800 $ 48,000 April 2,520 $ 51,200 May 2,700 $53,600 June 3,300 $ 56,800 July 3,900 $ 59,200 August 4,500 $ 61,600 September 4,200 $ 60,000 October 2,700 $ 54,400 November 1,860 $ 49,600 December 3,900 $ 58,400 Required: 1. Using the least-squares regression method, estimate the variable overhead cost per direct labour-hour and the total fixed overhead cost per month. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per direct labour-hour to 2 decimal places.) Variable overhead cost per direct labour-hour Total fixed cost per month 2. Express the cost data derived in part 1 above in the form Y= a + bX. (Round Fixed cost to the nearest whole dollar amount and the Variable cost to 2 decimal places.) Y = + 3. Using the cost formula stated in part 2, estimate total overhead costs for a month where direct labour-hours are expected to be 3,900. (Round your Variable cost per direct labor hour to 2 decimal places and round your final answer to the nearest whole dollar amount.) Total overhead costs
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Suppose a car rental company charges $110 for the first day and $60 for each additional or partial day. Let S(x) represent the cost of renting a car for x days. Find the value of S(4.5). 2 answers
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Comparative financial statements of the Boeckman Company for 2009 and 2010 are as follows: Comparative Balance Sheets Comparative Income Statements Additional information: The Boeckman Company is...
-
Does the length (mm) of the golden mantled ground squirrel (Spermophilus lateralis) differ by latitude in California? A graduate student captured squirrels at four locations across California. Listed...
-
Which steps are followed in the research process for destination management?
-
Which classification of a lease is more important for cash flows and valuation: that of the FASB or the IRS?
-
Llungby AB spent 1,000,000 krone in 2017 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an...
-
When an object is placed between the pole(P) and focus(F) of a concave mirror, the image formed is (i) behind the mirror (ii) virtual and erect and (iii) larger than the object (or magnified) M A' E...
-
[25points] Question 1 [default,02] (a) Consider the following one period trinomial model: {W, W2, W3}, P(w;) = 1/3 for i = 1, 2, 3, a bank account B with interest rate r = 0, and one stock S with So...
-
A truck cruising with the velocity 120 km/hour, collides elastically with a cow on the express way. What would be the cow's velocity in the frame of reference of the truck's driver? Why? Two billiard...
-
In the swing carousel amusement park ride, riders sit in chairs that are attached by a chain to a large rotating drum as shown in (Figure 1). As the carousel turns, the riders move in a large circle...
-
1. A uniform plane wave of 200 MHz traveling in free space strikes a large block of o=0 normal to the surface located at y = 0 as materials having &, 4, , 9 and shown below. H HA = ni E H a=0 X + =...
-
Consider a classical gas consisting of N impenetrable hard sphere particles of radius R. If the gas is placed in a relatively large container of volume V, a. (5%) determine the dependence of (N,V, E)...
-
10) An object was a mass of 10.0 kg is at rest at the top of a frictionless inclined plane of length 8.00 m and an angle of inclination 30.0 with the horizontal. The object is released from this...
-
You need to perform a SWOT analysis for TESLA and also perform a SWOT analysis for TATA motors
-
Identify the source of funds within Micro Credit? How does this differ from traditional sources of financing? What internal and external governance mechanisms are in place in Micro Credit?
-
Explain the difference between isotropic total cross-section and the transport crosssection as in Eq. (5.49). Why transport cross-section is not used in the transport theory? Data From Equation...
-
Following up on question number 3, assume the school conducts a manifestation determination meeting. Tim attends the meeting with his parents. At the meeting, Tim tells the team that smoking helps...
-
Which of the following is not a characteristic of a defined benefit plan? A. A guaranteed retirement benefit. B. Risk of preretirement inflation assumed by employer. C. Benefits based upon the...
Study smarter with the SolutionInn App