Question

total annual cost equation y = 21725+ .75 x No of fleet miles Path:p Words QUESTION 4 300 . The following data was obtained from the books of the Delta Home Painting Company Month Overhead Costs Direct Labor Hours January $1,200 February 1,875 400 March 900 250 April 450 May 550 100 2,125 Compute the fixed and variable components of the monthly overhead costs using the high-low method. TT T Arial M3 (12pt) TEE 5.025 CELA 4021250

Answer 1

Calculation Of Variable Cost
	=	Highest Overhead Cost - Lowest Overhead Cost
		Highest Labor Hours - Lowest Labor Hours
	=	$2125-550
		450-100
	=	$4.5 per labor hour
		Therefore Fixed Cost would be
		Fixed cost = Highest Overhead cost – (Variable cost per unit x Highest activity hours)
			=$2125 - ($4.5 * 450)
			=$2125-2025
			=$100