The following selected data were taken from the accounting records of Colorado Enterprises: Month Machine Hours Manufacturing Overhead May 55,000 $ 979,000 June 63,600 1,166,000 July 86,000 1,465,300 August 61,000 998,000 Manufacturing overhead consists of three different costs; (1) machine supplies (variable), (2) property taxes (fixed), and (3) plant maintenance (semivariable). July's overhead costs were $179,500 for machine supplies, $25,800 for property taxes, and $1,260,000 for plant maintenance. Required: A. Determine the machine supplies and property taxes for May. B. By using the high-low method, analyze Colorado’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per machine hour. C. Assume that present cost behavior patterns continue into future months. Estimate the total amount of manufacturing overhead the company can expect in September if 59,600 machine hours are worked. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The following selected data were taken from the accounting records of Colorado Enterprises:
| Month | Machine Hours | Manufacturing Overhead | |||||
| May | 55,000 | $ | 979,000 | ||||
| June | 63,600 | 1,166,000 | |||||
| July | 86,000 | 1,465,300 | |||||
| August | 61,000 | 998,000 | |||||
Manufacturing overhead consists of three different costs; (1) machine supplies (variable), (2) property taxes (fixed), and (3) plant maintenance (semivariable). July's overhead costs were $179,500 for machine supplies, $25,800 for property taxes, and $1,260,000 for plant maintenance.
Required:
A. Determine the machine supplies and property taxes for May.
B. By using the high-low method, analyze Colorado’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per machine hour.
C. Assume that present cost behavior patterns continue into future months. Estimate the total amount of manufacturing overhead the company can expect in September if 59,600 machine hours are worked.
Note:-
- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
- Answer completely.
- You will get up vote for sure.
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