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Cost Estimation & CVP It is budget season and Margo, Inc is planning for next year and requires a breakdown of the factory overhead cost into the fixed and variable elements. The following data on the OH cost and machine hours are available for the past six months:

Cost Estimation & CVP It is budget season and Margo, Inc is planning for next year and requires a breakdown of the factory overhead cost into the fixed and variable elements. The following data on the OH cost and machine hours are available for the past six months:

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...
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Cost Estimation & CVP It is budget season and Margo, Inc is planning for next year and requires a breakdown of the factory overhead cost into the fixed and variable elements. The following data on the OH cost and machine hours are available for the past six months: OH Cost Machine Hours $ 23,910 $ 23,397 $24,153 $23,964 $ 23,732 $ 23,559 $ 142,715 Month January February March April May June Total 1,800 1,230 2,070 1,860 1,602 1,410 9,972 Required: 1. Assume that Mago uses the high-low method of analysis, determine the variable OH cost per machine hour and monthly fixed cost Additional Sales & Cost information for Margo's Sales Price Machine Hours Per unit Direct Labor Hours Per Unit Direct labor cost per unit Direct Material cost per unit 2$ 75.30 2 2.5 2$ $ 40.00 18.50 2. How many units do they need to sell to breakeven in one month 3. How many units do they need to sell to earn a pre-tax profit of $52,410 in one month 4. Create a contribution margin income statement for the pre-tax profit of $52,410
Transcribed Image Text:Cost Estimation & CVP It is budget season and Margo, Inc is planning for next year and requires a breakdown of the factory overhead cost into the fixed and variable elements. The following data on the OH cost and machine hours are available for the past six months: OH Cost Machine Hours $ 23,910 $ 23,397 $24,153 $23,964 $ 23,732 $ 23,559 $ 142,715 Month January February March April May June Total 1,800 1,230 2,070 1,860 1,602 1,410 9,972 Required: 1. Assume that Mago uses the high-low method of analysis, determine the variable OH cost per machine hour and monthly fixed cost Additional Sales & Cost information for Margo's Sales Price Machine Hours Per unit Direct Labor Hours Per Unit Direct labor cost per unit Direct Material cost per unit 2$ 75.30 2 2.5 2$ $ 40.00 18.50 2. How many units do they need to sell to breakeven in one month 3. How many units do they need to sell to earn a pre-tax profit of $52,410 in one month 4. Create a contribution margin income statement for the pre-tax profit of $52,410
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