The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling...
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The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different leveis, are presented as follows: Resource Number of Moves Total Cost Forklift depreciation: Low 3,500 $1,900 High 15,500 1,900 Indirect labor: Low 3,500 $64,800 High 15,500 146,400 Fuel and oil for forklift: Low 3,500 $3,045 High 15,500 13,485 Required: If required, round your answers to two decimal places. Enter a "0" if required. 1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components- Forklift depreciation: Indirect labor: Y $ Fuel and oil for forklift: X. 2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 11,000 moves. Forklift depreciation Indirect labor Fuel and oil for forklift 3. Construct a cost forrhula that can be used to predict the total cost of the three resources combined. If required, round your answers to two decimal places. Materials handling cost $ Using this formula, predict the total materials handling cost if activity output is 11,000 moves. The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different leveis, are presented as follows: Resource Number of Moves Total Cost Forklift depreciation: Low 3,500 $1,900 High 15,500 1,900 Indirect labor: Low 3,500 $64,800 High 15,500 146,400 Fuel and oil for forklift: Low 3,500 $3,045 High 15,500 13,485 Required: If required, round your answers to two decimal places. Enter a "0" if required. 1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components- Forklift depreciation: Indirect labor: Y $ Fuel and oil for forklift: X. 2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 11,000 moves. Forklift depreciation Indirect labor Fuel and oil for forklift 3. Construct a cost forrhula that can be used to predict the total cost of the three resources combined. If required, round your answers to two decimal places. Materials handling cost $ Using this formula, predict the total materials handling cost if activity output is 11,000 moves.
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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