Question

January February March April Machine Hours 5,900 3,200 4,900 2,600 Manufacturing Overhead $ 300,000 224,000 263,800 190,000 a-1. Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour. (Round your answer to 2 decimal places.) a-2. Use the high-low method to determine the fixed element of monthly overhead cost. b. Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part a to forecast May's manufacturing overhead costs. c. Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated these costs? 4- Manufacturing overhead cost Fixed element of monthly overhead cost Estimated manufacturing overhead cost $ 33.33 per machine hour $ 103,333 $ 279,982 Amount Under estimated Over estimated C. February March

Answer 1

A в 2 a-1. Manufacturing overhead cost $33.33 per machine hour a-2 Fixed element of monthly overhead cost $103,353 b. Estimated manufacturing overhead cost $280,002 c. February March Under estimated Over estimated Amount $13,991 $2,870 Calculations are shown below: D 2 a-1. Manufacturing overhead cost =(300000-190000) (5900-2600) per machine hour 4 a-2 Fixed element of monthly overhead cost =300000-(5900*33.33) 6 6. Estimated manufacturing overhead cost =(5300*33.33)+C4 8 9 c. February March Under estimated Over estimated Amount I=224000-(3200*33.33)+C4) =((4900*33.33)+C4)-263800