The following information is available regarding the total manufacturing overhead $($semi$-$variable cost$)$ of Bursa Manufacturing Company for a recent four$-$month period:

Machine$-$Hours Manufacturing Overhead

January $5,800$ $ $300,000$

February $3,200224,000$

March $4,900263,800$

April $2,700190,000$

$$ 

 

Required:

a$-1.$ Use the high$-$low method to determine the variable element of manufacturing overhead costs per machine$-$hour.

Note: Round your answer to $2$ decimal places.

a$-2.$ Use the high$-$low method to determine the fixed element of monthly overhead cost.

Note: Round "Variable manufacturing overhead cost" to $2$ decimal places.

b$.$ Bursa expects machine$-$hours in May to equal $5,300.$ Use the cost relationships determined in part a to forecast May's manufacturing overhead costs.

Note: Round "Variable manufacturing overhead cost" to $2$ decimal places.

c$.$ Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over$-$ or underestimated these costs?

Note: Round "Variable manufacturing overhead cost" to $2$ decimal places.

Answer rating: 100% (QA)

a1 To determine the variable element of manufacturing overhead costs per machinehour using the highlow method we need to find the variable cost per ma... View the full answer