X Company uses the high-low method to predict monthly overhead costs. The following were May and...

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X Company uses the high-low method to predict monthly overhead costs. The following were May and...

X Company uses the high-low method to predict monthly overhead costs. The following were May and September cost and activity results:

	OH Cost	Production
May	$6,435	1,350
September	$13,427	5,150

If December production is expected to be 4,450 units, what are expected total fixed overhead costs in December [round unit costs to two decimal places]?

business accounting

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Answer 1

Answer #1

Solution:

variable cost per unit = ($13427 - $6435) / (5150- 1350) = $1.84

Fixed Overhead cost = Total cost - variable cost = $13427 - (5150*1.84) = $3,951

Hence,

expected total fixed overhead costs in December = $3,951

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Answer 2

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