What total overhead cost would you expect to be incurred at

Assignment Help Accounting Basics

Reference no: EM13573359

Golden Company's total overhead cost at various levels of activity are presented below:

Month	Machine-Hours	Total Overhead Cost
March	54,000	$196,400
April	44,000	$171,400
May	64,000	$221,400
June	74,000	$246,400

Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 44,000 machine-hour level of activity is as follows:


Utilities (variable)	$	57,200
Supervisory salaries (fixed)		45,000
Maintenance (mixed)		69,200

Total overhead cost	$	171,400

The company wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

Estimate how much of the $246,400 of overhead cost in June was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $246,400 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs within the relevant range.) (Do not round intermediate calculations. Omit the "$" sign in your response.)

Maintenance cost in June

2.	Using the high-low method, estimate a cost formula for maintenance. (Round the "Variable cost per unit" to 2 decimal places and "Fixed cost" to the nearest dollar amount. Omit the "$" sign in your response.)

3.	Express the company's total overhead cost in the form Y = a + bX. (Round the "Variable cost per unit" to 2 decimal places and "Fixed cost" to the nearest dollar amount. Omit the "$" sign in your response.)

4.	What total overhead cost would you expect to be incurred at an activity level of 49,000 machine-hours?(Do not round intermediate calculations. Omit the "$" sign in your response.)

Total overhead cost

Reference no: EM13573359

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