FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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. Angle has gathered the
following cost information from the past year:
A.)
Identify the high and low points
(Activity level) $
High
Low
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, eg. 15.25 and fixed cost 5 O decimal places, e.g. 5,275.)
Variable cost = $________ per labor hour.
Fixed cost=$____________
B.)
Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur?
Total Cost =$______
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= $_________
Transcribed Image Text: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
January
February
March
April
May
June
July
August
September
October
November
December
Total
Labor
Hours
3,800
3,100
3,200
4,300
4,600
5,800
8,100
7,800
6,700
4,800
3,400
6,800
62,400
Overhead
Costs
$62,300
59,090
60,090
64,450
67,5
71,900
81,590
78,500
73,170
68,600
62,180
74,200
$823.610
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