Question

X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead...

X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead cost function, with units produced as the independent variable. She has the following past monthly observations to work with:

Units Produced Cost
8550 37325
6500 31847
7100 32947
9100 38425
7500 34704
8000 35975

X Company estimates that 9,500 units will be produced in July. What are estimated fixed overhead costs for July [round variable costs per unit to two decimal places]?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

High - Low Method

Variable cost per unit = (Cost at highest unit produced - Cost at lowest unit produced) / (Highest units produced - Lowest units produced)

= ($38,425 - $31,847) / (9,100 - 6,500)

= $6,578 / 2,600

= $2.53

Fixed cost at highest activity

Fixed cost = Total cost - Variable cost

= $38,425 - ($2.53 * 9,100)

= $38,425 - $23,023

= $15,402

Fixed cost at Lowest activity

Fixed cost = Total cost - Variable cost

= $31,847 - ($2.53 * 6,500)

= $31,847 - $16,445

= $15,402

Esimated fixed overhead costs for July = $15,402

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead...
X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead cost function, with units produced as the independent variable. She has the following past monthly observations to work with: Units Produced Cost 6500 30882 8900 36714 6900 31932 7600 34990 8600 35714 7900 34664 X Company estimates that 9,300 units will be produced in July. What are estimated fixed overhead costs for July [round variable costs per unit to two decimal places]?
X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead...
X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead cost function, with units produced as the independent variable. She has the following past monthly observations to work with: Units Produced Cost   6,900 $32,796   8,450 36,171 8,050 35,021 6,400 31,346 8,900 37,471 7,450 34,967 X Company estimates that 9,500 units will be produced in July. What are estimated fixed overhead costs for July [round variable costs per unit to two decimal places]?
X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead...
X Company's accountant uses the high-low method to determine the parameters of the company's monthly overhead cost function, with units produced as the independent variable. She has the following past monthly observations to work with: Units Produced Cost   7,400 $35,106   9,100 38,575 8,400 37,275 7,100 32,993 6,500 31,893 7,900 36,525 X Company estimates that 10,000 units will be produced in July. What are estimated fixed overhead costs for July?
X Company's accountant uses account analysis to estimate costs for each month, with machine hours as...
X Company's accountant uses account analysis to estimate costs for each month, with machine hours as the independent variable. In July, she did the following cost behavior analysis for three specific cost items: Cost Item Total Cost Variable Cost Insurance $327,500 $0 Indirect labor 289,201 193,072 Utilities 269,984 269,984 In July, machine hours were 8,800. If machine hours in November are expected to be 9,300, what are expected total costs for these three cost items in November?
1. X Company uses account analysis to estimate total overhead costs for each month, with units...
1. X Company uses account analysis to estimate total overhead costs for each month, with units produced as the activity measure. In May, when production was 1,000 units, the plant manager classified each overhead cost item as fixed and variable as follows: Cost Item Total Cost Cost Behavior Utilities    $21,200   100% variable Supplies     23,100 60% variable Maintenance     20,000 100% fixed If September production is expected to be 1,180 units, what are estimated total overhead costs in September (round unit costs...
X Company's accountant uses account analysis to estimate costs for each month, with machine hours as...
X Company's accountant uses account analysis to estimate costs for each month, with machine hours as the independent variable. In September, she did the following cost behavior analysis for three specific cost items: Cost Item Total Cost Variable Insurance 310500 0 Utilities 272667 272667 Indirect Labor 322238 231539 In September, machine hours were 9,700. If machine hours in December are expected to be 8,400, what are expected total costs for these three cost items in December?
4.) X Company uses an activity-based costing allocation system. On January 1, 2020, its accountant budgeted...
4.) X Company uses an activity-based costing allocation system. On January 1, 2020, its accountant budgeted the following costs and cost drivers for three of the activities that are used in the ABC system: Activity   Budgeted cost   Cost driver Assembly   $134,000   92,700 parts Packaging   $80,400   13,000 finished units Purchasing   $53,600   4,700 purchase orders In May of 2020, 563 units of Product C were finished, requiring $10,100 of direct materials, 5,000 direct labor hours, 1,410 parts, and 34 purchase orders. How...
The Macon Company uses the high-low method to determine its cost equation. The following information was...
The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor Costs Busiest month (June) 14,000 $ 200,000 Slowest month (December) 6,000 $ 120,000 If Macon expects to use 10,000 machine hours next month, what are the estimated direct labor costs? $160,000. $175,000. $180,000. $150,000.
X Company's 2019 budgeted overhead cost function was C=$8.60X + $231,900, where X is the number...
X Company's 2019 budgeted overhead cost function was C=$8.60X + $231,900, where X is the number of units produced. The following information is also available for 2019: Master     Actual      Budget     Results     Production 10,500 units 13,400 units Total variable costs $90,300   $124,389   Total fixed costs $231,900   $234,471   1. What was the total overhead static budget for 2019? 2. What was the total overhead flexible budget variance for 2019 [a positive number means a favorable variance and a negative number means an...
X Company wants to estimate overhead costs in March, when production is expected to be 1,300...
X Company wants to estimate overhead costs in March, when production is expected to be 1,300 units. To determine the parameters of its overhead cost function, it used account analysis with the January cost information below and when production was was 1,000 units. Total   Total Variable Utilities $42,800 $42,800       Maintenance 57,000 30,780       Supervision 23,000 0           Using the resulting cost function, what is X Company's estimate of total overhead costs in March?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT