Solution-Estimate a cost formula for manufacturing overhead

Estimate a cost formula for manufacturing overhead

Assignment Help Cost Accounting

Reference no: EM132825595

Question - Rover Company manufactures a single product. The Company keeps careful records of manufacturing activities from which the following information has been extracted:

	March-Low	June-High
Number of units produced	6,000
Cost of goods manufactured	P168,000	P257,000
Work in process inventory, beginning	P9,000	P32,000
Work in process inventory, ending	P15,000	P21,000
Direct materials cost per unit	P6	P6
Direct labor cost per unit	P10	P10
Manufacturing overhead cost, total	?	?

The company's manufacturing overhead consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month.

Required -

1. For both March and June, estimate the amount of manufacturing overhead cost added to production. The Company had no underapplied or overapplied overhead in either month.

2. Using the high-low method, estimate a cost formula for manufacturing overhead. Express the variable portion of the formula in terms of a variable rate per unit of product.

3. If 7,000 units are produced during a month, what would be the cost of goods manufactured? (Assume that the work in process inventories do not change and there is no underapplied or overapplied overhead cost for the month.

Reference no: EM132825595

Questions Cloud

What amount should be reported as the company income tax : At the end of Year One, a company has an enacted.On its Year Two income statement, what amount should be reported as the company's income tax expense-deferred ?

Election campaign of a mayoral candidate : You are the project manager for an election campaign of a mayoral candidate in a medium-size city:

Define cross-border merging and acquisition : You just won the lottery (10 million dollars after taxes). Based on your knowledge, where would you invest and how would you invest your money?

Conventional computer-aided manufacturing industry : Information and communication technology (ICT) has promoted the evolution of conventional computer-aided manufacturing industry

Estimate a cost formula for manufacturing overhead : Estimate a cost formula for manufacturing overhead. Express the variable portion of the formula in terms of a variable rate per unit of product

What are some examples of office politics : What are some examples of office politics? Are personal attacks or the bandwagon fallacy part of it? What are some practices for dealing with office

Case study of employee turnover at ice cream deli in mexico : 1) Which results are systematic or confirmed by the two methodologies used to evaluate causes of turnover?

Overall risk posture of the organization : What is the risk posture for each particular system as it contributes to the overall risk posture of the organization?

Why are systems documentation important to effective : What major differences would you expect to find in a client's organization structure and transaction processing when the client converts

User Account

All Pages

Estimate a cost formula for manufacturing overhead

Reference no: EM132825595

Reference no: EM132825595

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT