Question

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?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

we will find fixed and variable costs.

Total cost [Variable+fixed] Variable Fixed
insurance $310,500 0 $310,500
utilities $272,667 $272,667 0
Indirect labor $322,238 $231,539 $90,699[$322,238-231,539]
Total $905,405 $504,206 401,199

Total fixed costs are constant . They remain same at all levels of activity.

Variable cost per Machine hours will remain same.

variable cost per MH = total variable cost/ machine hours

=$504,206/9,700 hours

=$51.98 per machine hour

December cost:

= Total fixed cost+total variable cost (fixed costs are constant so they will be same as in septem9ber)

=$401,199 + ($51.98 per machine hour*8400 hours)

=$837,831

Please upvote if you find this helpful.Incase of query please comment.

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 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...
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...
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?
Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 3,800 machine-hours...
Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 3,800 machine-hours Variable overhead costs: Supplies $ 22,040 Indirect labor 36,860 Fixed overhead costs: Supervision 16,900 Utilities 7,200 Depreciation 8,200 Total overhead cost $ 91,200 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,700 machine-hours rather than 3,800 machine-hours?
Prince Company’s total overhead costs at various levels of activity are presented below:   Month Machine Hours...
Prince Company’s total overhead costs at various levels of activity are presented below:   Month Machine Hours Total Overhead Cost   September 112,800 $ 781,512   October 89,200 $ 662,568   November 157,200 $ 1,005,288   December 165,000 $ 1,044,600 Assume that the overhead cost above consists of utilities, supervisory salaries, depreciation, and maintenance. The breakdown of these costs at the 89,200-machine-hour level of activity in October is as follows:   Utilities (variable) $ 233,704   Supervisory salaries       and depreciation (fixed) 172,000   Maintenance (mixed)      256,864   Total overhead...
A company's planned activity level for next year is expected to be 100,000 machine hours. At...
A company's planned activity level for next year is expected to be 100,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs: Variable Fixed Indirect materials $140,000 Depreciation $60,000 Indirect labor 200,000 Taxes 10,000 Factory supplies 20,000 Supervision 50,000 A flexible budget prepared at the 80,000 machine hours level of activity would show total manufacturing overhead costs of
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 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]?
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]?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT