Meng Company is preparing a flexible budgetfor next year and requires a breakdown of the factory maintenance cost into the fixed and variable elements. The maintenance costs and machine hours (the selected cost driver) for the past six months are as follows: Maintenance costs Machine hours January 15,500 1,800 February 10,720 1,230 March 15,100 1,740 April 15,840 2,190 May 14,800 1,602 June 10,600 1,590 1. If Meng Company uses the high -low method of analysis, the estimated variable rate of maintenance costs per machine is? 2. The average annual fixed maintenance costs amounts to? 3. What is the average rate per hour at a level of 1,500 machine hours?
Meng Company is preparing a flexible budgetfor next year and requires a breakdown of the factory maintenance cost into the fixed and variable elements. The maintenance costs and machine hours (the selected cost driver) for the past six months are as follows: Maintenance costs Machine hours January 15,500 1,800 February 10,720 1,230 March 15,100 1,740 April 15,840 2,190 May 14,800 1,602 June 10,600 1,590 1. If Meng Company uses the high -low method of analysis, the estimated variable rate of maintenance costs per machine is? 2. The average annual fixed maintenance costs amounts to? 3. What is the average rate per hour at a level of 1,500 machine hours?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...
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