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PROBLEM - High-Low Method: Predicting Cost 101, LO Colby Limited is a manufacturing company whese total factory overhead cost
Chapter 3 Cost Behaviour: Analysis and Use The factory overhead costs above consist of indirect materials, rent, and maintena

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Answer #1
1
Total factory overhead costs 17625000
Less: Indirect materials 7500000 =5000000/50000*75000
Less: Rent 6000000
Maintenance cost 4125000
2
Maintenance cost Machine hours
High 4125000 75000
Low 3250000 50000
Difference 875000 25000
Variable cost 35 =875000/25000
Fixed cost 1500000 =4125000-(75000*35)
Y = $1500000+ $35X
3
Indirect materials 7000000 =5000000/50000*70000
Rent 6000000
Maintenance cost 3950000 =1500000+(70000*35)
Total factory overhead costs 16950000
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