Estimate the cost formula for manufacturing overhead

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Reference no: EM133000709

Question - High-Low Method - Selected data about Pitkin Company's manufacturing operations at two levels of activity are presented below:

Number of Units Produced 10,000 15,000

Total Manufacturing Costs $157,000 $225,000

Direct Material Cost per Unit $4 $4

Direct Labour Cost per Unit $6 $6

Required - Using the high-low method, estimate the cost formula for manufacturing overhead. Assume that both direct material and direct labour are variable costs. Using your results, estimate the total manufacturing cost at a level of 12,000 units.

Reference no: EM133000709

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