Question

BO 894,285 CO 8117,836 DU 5. AO $75,128 spt X Company uses the high-low it any uses the high-low method to predict monthly overhead costs. The following were May and September cost and activity results May September OH Cost $7.477 $10,757 Production 2,750 4,800 If December production is expected to be 4,050 units, costs to two decimal places? 6. AO $1,403 BO $1,612 CO $1.921 DO o be 4,050 units, what are expected total fixed overhead costs in December round DO $2,248 EO $2,630 FO $3,077

Answer 1

Solution:

Variable cost per unit = ($10757 - $7477) / (4800-2750) = $1.60

Fixed costs per month = Total cost - Variable costs = $10757 - (4800*$1.60) = $3,077

Hence Fixed overhead cost in December = $3,077

Hence option F is correct.