Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Month Machine-Hours April 70,000 May 60,000 June 80,000 July 90,000 Cost $198,000 $174,000 $222,000 $246,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed). Maintenance (mixed). Total overhead cost $ 48,000 21,000 105,000 $174,000 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) 2. 3. 4. Using the high-low method, estimate a cost formula for maintenance. Express the company's total overhead cost in the form Y= a + bx. What total overhead cost would you expect to be incurred at an activity level of 75,000 machine-hours?

Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Month Machine-Hours April 70,000 May 60,000 June 80,000 July 90,000 Cost $198,000 $174,000 $222,000 $246,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed). Maintenance (mixed). Total overhead cost $ 48,000 21,000 105,000 $174,000 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) 2. 3. 4. Using the high-low method, estimate a cost formula for maintenance. Express the company's total overhead cost in the form Y= a + bx. What total overhead cost would you expect to be incurred at an activity level of 75,000 machine-hours?

Name: None Crosshill Company's total overhead costs at various levels of act
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Description: None Crosshill Company's total overhead costs at various levels of activity are presented below:Total OverheadMonthMachine-HoursApril70,000May60,000June80,000July90,000Cost$198,000$174,000$222,000$246,000Assume that the overhead cost above consists o

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...

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Crosshill Company's total overhead costs at various levels of activity are presented below: Month Machine- Hours Total Overhead Cost April 70,000 $ 202,200 May 60,000 $ 180,300 June 80,000 $ 224,100 July 90,000 $ 246,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable) $ 52,200 Supervisory salaries (fixed) 21,000 Maintenance (mixed) 107,100 Total overhead cost $ 180,300 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $246,000 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…