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.
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.)
- kswck2Lv 71 month ago
What do you learn if someone else does Your homework. Sorry kid, not me.
- Anonymous1 month ago
move to homework help.