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 September cost and activity

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Answer 1

Answer #1

Variable overhead cost per unit = (Overhead cost for September - Overhead cost for May) / (Units produced for September - Units produced for May)
Variable overhead cost per unit = ($14,850 - $8,870) / (4,950 - 2,350)
Variable overhead cost per unit = $2.30

Fixed overhead cost = Overhead cost for September - Variable overhead cost per unit * Units produced for September
Fixed overhead cost = $14,850 - $2.30 * 4,950
Fixed overhead cost = $3,465

So, the total fixed overhead costs in December is $3,465

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Answer 2

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