Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the following cost information from the past year: Month   Labor Hours   Overhead Costs   January     2,800       $51,840     February     2,100       49,120     March     2,200       50,120     April     3,300       53,640     May     3,600       56,520     June     4,800       60,040     July     7,100       68,120     August     6,800       65,240     September     5,700       60,680     October     3,800       57,440     November     2,400       52,000     December     5,800       61,640           Total     50,400       $686,400     (a)   Correct answer icon Your answer is correct. Identify the high and low points.     Activity Level   $ High point   enter the activity level for high point   $enter the high point in dollars  Low point   enter the activity level for low point   $enter the low point in dollars  Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 15.25 and fixed cost to 0 decimal places, e.g. 5,275.) Variable cost = $enter the variable cost per labor hour in dollars rounded to 2 decimal places  per labor hour Fixed cost = $enter the fixed cost amount in dollars rounded to 0 decimal places      eTextbook and Media         Attempts: 1 of 3 used       (b)   Incorrect answer icon Your answer is incorrect. Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur? Total cost = $enter the total cost amount in dollars rounded to 0 decimal places    eTextbook and Media   Save for Later     Attempts: 1 of 3 used Submit Answer     (c)     If Angie books one more catering job for the month, requiring 350 labor hours, how much additional overhead should she expect to incur? Additional overhead = $enter the additional overhead amount in dollars rounded to 0 decimal places

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the following cost information from the past year:

Month
 
Labor Hours
 
Overhead Costs
 
January
    2,800       $51,840    
February
    2,100       49,120    
March
    2,200       50,120    
April
    3,300       53,640    
May
    3,600       56,520    
June
    4,800       60,040    
July
    7,100       68,120    
August
    6,800       65,240    
September
    5,700       60,680    
October
    3,800       57,440    
November
    2,400       52,000    
December
    5,800       61,640    
      Total
    50,400       $686,400    

(a)

 
Correct answer icon
Your answer is correct.
Identify the high and low points.

    Activity Level   $
High point
  enter the activity level for high point   $enter the high point in dollars 
Low point
  enter the activity level for low point   $enter the low point in dollars 


Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 15.25 and fixed cost to 0 decimal places, e.g. 5,275.)

Variable cost
= $enter the variable cost per labor hour in dollars rounded to 2 decimal places  per labor hour
Fixed cost
= $enter the fixed cost amount in dollars rounded to 0 decimal places   
 

eTextbook and Media

 
 
 
 
Attempts: 1 of 3 used
 
 
 

(b)

 
Incorrect answer icon
Your answer is incorrect.
Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur?

Total cost = $enter the total cost amount in dollars rounded to 0 decimal places 
 

eTextbook and Media

 
Save for Later
 
 
Attempts: 1 of 3 used
Submit Answer
 
 

(c)

 
 
If Angie books one more catering job for the month, requiring 350 labor hours, how much additional overhead should she expect to incur?

Additional overhead = $enter the additional overhead amount in dollars rounded to 0 decimal places 
 
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