The following information is available for a company's maintenance cost over the last seven months. Maintenance Cost Month Units Produced June July 90 180 120 150 210 August September October November December 240 60 $ 3,710 5,240 4,220 4,730 5,750 6,260 3,200 Using the high-low method, estimate both the fixed and variable components of its maintenance cost. High-Low method - Calculation of variable cost per unit produced Cost at high point minus cost at low point Change in cost Change in volume Volume at high point minus volume at low point Total cost at the high point Variable costs at the high point: Volume at the high point: Variable cost per unit produced Total variable costs at the high point Total fixed costs Total cost at the low point Variable costs at the low point: Volume at the low point: Variable cost per unit produced Total variable costs at the low point Total fixed costs 0

The following information is available for a company's maintenance cost over the last seven months. Maintenance Cost Month Units Produced June July 90 180 120 150 210 August September October November December 240 60 $ 3,710 5,240 4,220 4,730 5,750 6,260 3,200 Using the high-low method, estimate both the fixed and variable components of its maintenance cost. High-Low method - Calculation of variable cost per unit produced Cost at high point minus cost at low point Change in cost Change in volume Volume at high point minus volume at low point Total cost at the high point Variable costs at the high point: Volume at the high point: Variable cost per unit produced Total variable costs at the high point Total fixed costs Total cost at the low point Variable costs at the low point: Volume at the low point: Variable cost per unit produced Total variable costs at the low point Total fixed costs 0

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

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Current Attempt in Progress The controller of Oriole Industries has collected the following monthly cost data for use in analyzing the behavior of maintenance costs. Month January February March April May June Total Maintenance Costs $2,860 3,160 3,760 4,660 3,360 5,260 Total Machine Hours 320 370 520 670 520 720
Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round to the nearest cent. Machine Hours March April May June Oa. $0.15 Ob. $1.02 Oc. $0.98 Od. $1.75 Cost $3,007 2,696 2,803 3,778 14,577 10,259 11,668 17,667
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X Company accumulates the following data about maintenance costs, a mixed cost, using hours as the activity level: Hours Cost 35,000 $185.000 August September 40,000 210,000 October 30.000 160.000 November 42.000 220,000 December 51.000 265,000
Given the following cost and activity observations for Bounty Company’s utilities, use the high-low method to determine Bounty’s variable utilities cost per machine hour. Round to the nearest cent. Cost Machine Hours March $3,139 14,709 April 2,650 9,989 May 2,817 12,342 June 3,656 17,720 a. $0.74 b. $0.13 c. $1.43 d. $0.78
The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
2. Tech Company has the following data for its maintenance costs: month Total Maintenance Costs Total Machine Hours January $2900 300 February 3000 400 March 3600 600 April 4300 790 May 3200 500 June 4500 800 Determine the fixed and variable cost using the high low method!
X Company accumulates the following data about maintenance costs, a mixed cost, using hours as the activity level: Hours Cost August 35,000 $185,000 September 40,000 210,000 October 30,000 160,000 November 42,000 220,000 December 51,000 265,000 Based on the above, in applying the high-low method, what is the unit variable cost? * $5 $0.5 O $2.05 O None of the above
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