a) Determine fixed and variable values
Variable values = Change in Cost/Change in machine hour = (2710-2476)/(509-394) = 2.03 per machine hour
Fixed Cost = 2710-(509*2.03) = $1677
b) Month's overhead cost = 1677+(896*2.03) = $3496
1) Direct labor hours = 1750+(3265*.35) = 2893
2) Machine hour = 1677+(679*2.03) = $3055
3) Better activity base = Machine hour
Question 14 z Company uses the formula y-a + bX to predict and analyze overhead costs....
XYZ Company uses the formula y = a +bX to predict and analyze overhead costs. In the previous year, XYZ used $1,750 per month for the a factor and $0.35 for the b factor in applying overhead. XYZ has used direct labour hours in the past, but is wondering whether overhead behaviour is more closely associated with machine hours. The following data have been generated for consideration: Month Machine Hours Overhead Costs 453 $2,579 478 $3,073 397 $2,432 490 $2,820...
Question XYZ Company uses the formula y = a + bx to predict and analyze overhead costs. In the previous year, XYZ used $1,750 per month for the a factor and $0.35 for the b factor in applying overhead. XYZ has used direct labour hours in the past, but is wondering whether overhead behaviour is more closely associated with machine hours. The following data have been generated for consideration: Month Machine Hours Overhead Costs 1 457 $2,799 2 462 $2,994...
Question 14 XYZ Company uses the formula y = a + bX to predict and analyze overhead costs. In the previous year, XYZ used $1,750 per month for the a factor and $0.35 for the b factor in applying overhead. XYZ has used direct labour hours in the past, but is wondering whether overhead behaviour is more closely associated with machine hours. The following data have been generated for consideration: Month Machine Hours Overhead Costs 463 468 402 483 507...
Question 14 XYZ Company uses the formula y = a + bX to predict and analyze overhead costs. In the previous year, XYZ used $1,750 per month for the a factor and $0.35 for the b factor in applying overhead. XYZ has used direct labour hours in the past, but is wondering whether overhead behaviour is more closely associated with machine hours. The following data have been generated for consideration Month Machine Hours Overhead Costs 431 477 406 490 504...
Please answer properly thanks Question 7 XYZ Company uses the formula y = a + bx to predict and analyze overhead costs. In the previous year, XYZ used $1,750 per month for the a factor and $0.35 for the b factor in applying overhead. XYZ has used direct labour hours in the past, but is wondering whether overhead behaviour is more closely associated with machine hours. The following data have been generated for consideration: Month Machine Hours Overhead Costs 1...
Question 14 XYZ Company uses the formula y = a + bX to predict and analyze overhead costs. In the previous year, XYZ used $1,750 per month for the a factor and $0.35 for the b factor in applying overhead. XYZ has used direct labour hours in the past, but is wondering whether overhead behaviour is more closely associated with machine hours. The following data have been generated for consideration: Month Machine Hours Overhead Costs 1 414 $2,752 2 487...
Bonita Inc. has identified the following overhead costs and cost drivers for next year. Overhead Item Expected Cost Cost Driver Expected Actual Transactions Setup costs $87,912 No. of setups 396 Ordering costs 46,800 No. of orders 3,900 Maintenance costs 125,000 Machine hours 25,000 Power 26,495 Kilowatt hours 75,700 The following are two of the jobs completed during the year: Job 700 Job 701 Direct materials $1,200 $600 Direct labour $890 $420 Units completed 250 100 Direct labour hours 40 20...
Problem 3-36A Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2016, the following estimates were made for the year. Department D E K Manufacturing overhead $1,400,000 $1,250,000 $720,000 Direct labour costs $2,000,000 $1,250,000 $450,000 Direct labour hours 100,000...
Mercuri Company has gathered the following information: Variable manufacturing overhead costs $13,680 Fixed manufacturing overhead costs $10,710 Normal production level in labour hours 9,000 Standard labour hours 9,500 During the year, 3,050 units were produced, 10,900 hours were worked, and the actual manufacturing overhead was $21,800. Actual fixed overhead totalled $10,800. Mercuri applies overhead based on direct labour hours. Calculate the total, fixed, and variable predetermined overhead rates.(Round answers to 2 decimal places, e.g. 15.25.) Fixed predetermined ovehead rate $...
Question 3 International Steel Company has budgeted manufacturing overhead costs of $1,995,000. It has allocated overhead on a plant-wide basis to its two products (soft steel and hard steel) using machine hours, which are estimated to be 100,000 for the current year. The company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows: Activity Centre Cost Driver Estimated Activity Material handling Purchase orders Product testing Machine set-up Machining...