Anonymous
Anonymous asked in Business & FinanceOther - Business & Finance · 1 month ago

I am having some trouble solving #2 and #4 from this question?

Crosshill Company’s total overhead costs at various levels of activity are presented below:

Month Machine-Hours Total Overhead Cost

April 73,000 $ 141,000

May 63,000 $ 159,000

June 83,000 $ 333,000

July 93,000 $ 211,000

Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 63,000-machine-hour level of activity in May is as follows:

Utilities (variable) $ 33,000

Supervisory salaries (fixed) 21,000

Maintenance (mixed) 105,000

Total overhead cost $ 159,000

The company wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

1. Estimate how much of the $211,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $211,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.)

2. Using the high–low method, estimate a cost formula for maintenance. (Round the "Variable cost per unit" to 2 decimal places.)

3. Express the company’s total overhead cost in the form Y = a + bX. (Round the "Variable cost per unit" to 2 decimal places.)

4. What total overhead cost would you expect to be incurred at an activity level of 78,000 machine-hours? (Round the "Variable cost per unit" to 2 decimal places.)

2 Answers

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  • kswck2
    Lv 7
    1 month ago

    What do you learn if someone else does Your homework. Sorry kid, not me. 

  • Anonymous
    1 month ago

    move to homework help.

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