QUESTION 2 Part A On 20 May 2022, the company director assigned Marina, a newly hired...

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QUESTION 2 Part A On 20 May 2022, the company director assigned Marina, a newly hired management accountant at Hannah Expert Company, to predict the overhead costs for the company's operations for year 2023. In the year 2023, the company expects to produce 650 units of product X and Marina collected the following quarterly data: Required: (a) (b) Part B (a) (b) (c) Quarter Year 1/22 2/22 3/22 4/22 NWMFMS 1/20 2/20 DMG5034 3/20 4/20 1/19 2/19 3/19 4/19 Production of Product X (Units) 2,600 2,850 3,530 1,440 540 2,050 1,080 190 1.260 3,610 3,160 1,120 Overhead Costs (RM) 6,260 Using the high low method, calculate the variable cost per unit and the total fixed costs. (4 Marks) 6,550 8,000 4,000 If the company decides to increase production to 3,800 units in the 1" quarter of year 2023 due to high demand, compute the total overhead costs expected to occur if the company has yet maximised its capacity. (2 marks) 2,300 5,200 3.320 1.773 3,700 8,100 7,300 3,600 Briefly explain the cost behavior analysis and state TWO (2) importance to management. (3 marks) Explain the significance of the relevant range. MANAGEMENT ACCOUNTING (2 marks) Page 2 of 7 TRI2210 Contrast the effects of changes in the activity level on total fixed costs and on unit fixed (2 marks) costs. (Total: 13 marks) QUESTION 2 Part A On 20 May 2022, the company director assigned Marina, a newly hired management accountant at Hannah Expert Company, to predict the overhead costs for the company's operations for year 2023. In the year 2023, the company expects to produce 650 units of product X and Marina collected the following quarterly data: Required: (a) (b) Part B (a) (b) (c) Quarter Year 1/22 2/22 3/22 4/22 NWMFMS 1/20 2/20 DMG5034 3/20 4/20 1/19 2/19 3/19 4/19 Production of Product X (Units) 2,600 2,850 3,530 1,440 540 2,050 1,080 190 1.260 3,610 3,160 1,120 Overhead Costs (RM) 6,260 Using the high low method, calculate the variable cost per unit and the total fixed costs. (4 Marks) 6,550 8,000 4,000 If the company decides to increase production to 3,800 units in the 1" quarter of year 2023 due to high demand, compute the total overhead costs expected to occur if the company has yet maximised its capacity. (2 marks) 2,300 5,200 3.320 1.773 3,700 8,100 7,300 3,600 Briefly explain the cost behavior analysis and state TWO (2) importance to management. (3 marks) Explain the significance of the relevant range. MANAGEMENT ACCOUNTING (2 marks) Page 2 of 7 TRI2210 Contrast the effects of changes in the activity level on total fixed costs and on unit fixed (2 marks) costs. (Total: 13 marks)

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Step 11 Solution PARTA a Computation of variable cost per unit and the total fixed cost by using the high low method The high low method provides a si... View the full answer