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Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below. Month January February March Overhead Costs $53,300 54,620 Machine-Hours 2,200 2,260 2,500 60,500 April 3,220 65,420 May 3,400 67,710 June 4,000 69,480 July 4,600 75,270 August 5,200 76,640 September 4,900 74,260 October 3,400 67,400 November 2,560 62,190 December 4,600 73,410 Required: 1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed. cost element to the nearest dollar and the variable cost element to the nearest cent. Fixed cost Variable cost per machine hour 2. If the company expects to use 3,700 machine-hours next month, estimate total overhead costs. Total overhead costs

Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below. Month January February March Overhead Costs $53,300 54,620 Machine-Hours 2,200 2,260 2,500 60,500 April 3,220 65,420 May 3,400 67,710 June 4,000 69,480 July 4,600 75,270 August 5,200 76,640 September 4,900 74,260 October 3,400 67,400 November 2,560 62,190 December 4,600 73,410 Required: 1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed. cost element to the nearest dollar and the variable cost element to the nearest cent. Fixed cost Variable cost per machine hour 2. If the company expects to use 3,700 machine-hours next month, estimate total overhead costs. Total overhead costs

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below. Month January February March Overhead Costs $53,300 54,620 Machine-Hours 2,200 2,260 2,500 60,500 April 3,220 65,420 May 3,400 67,710 June 4,000 69,480 July 4,600 75,270 August 5,200 76,640 September 4,900 74,260 October 3,400 67,400 November 2,560 62,190 December 4,600 73,410 Required: 1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed. cost element to the nearest dollar and the variable cost element to the nearest cent. Fixed cost Variable cost per machine hour 2. If the company expects to use 3,700 machine-hours next month, estimate total overhead costs. Total overhead costs
Transcribed Image Text:Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below. Month January February March Overhead Costs $53,300 54,620 Machine-Hours 2,200 2,260 2,500 60,500 April 3,220 65,420 May 3,400 67,710 June 4,000 69,480 July 4,600 75,270 August 5,200 76,640 September 4,900 74,260 October 3,400 67,400 November 2,560 62,190 December 4,600 73,410 Required: 1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed. cost element to the nearest dollar and the variable cost element to the nearest cent. Fixed cost Variable cost per machine hour 2. If the company expects to use 3,700 machine-hours next month, estimate total overhead costs. Total overhead costs
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