XYZ Inc. employed several maintenance engineers to keep the equipment running in peakcondition. Over the past eight months, Travis incurred the following maintenance cost forthese engineers. Plant activity is best measured by direct labor hours.Direct Labor HoursMaintenance CostMonthJanuaryFebruary1,7002,000$14,300$16,200March1,800$16,700Аpril1,600$14,000May1,500$14,300June1,300$13,000JulyAugust1,000$12,2001,400$14,200REQUIREDa) Using the high-low method, determine the fixed and variable components of themaintenance costs.b) Briefly explain advantage using ABC Costing in managementSystems

Solution:- a)Calculation of variable cost per unit and fixed costs using High low method as…

Answered: REQUIRED a) Using the high-low method,…

REQUIRED a) Using the high-low method, determine the fixed and variable components of the maintenance costs. b) Briefly explain advantage using ABC Costing in management Systems

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

XYZ Inc. employed several maintenance engineers to keep the equipment running in peak
condition. Over the past eight months, Travis incurred the following maintenance cost for
these engineers. Plant activity is best measured by direct labor hours.
Direct Labor Hours
Maintenance Cost
Month
January
February
1,700
2,000
$14,300
$16,200
March
1,800
$16,700
Аpril
1,600
$14,000
May
1,500
$14,300
June
1,300
$13,000
July
August
1,000
$12,200
1,400
$14,200
REQUIRED
a) Using the high-low method, determine the fixed and variable components of the
maintenance costs.
b) Briefly explain advantage using ABC Costing in management
Systems

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