can someone help me to do question 1 and 2 thanks ! I. Complex Company has the f

Question

can someone help me to do question 1 and 2 thanks !

I. Complex Company has the following estimated costs for next year: Direct materials Direct labor Indirect materials Sales commissions Salary of production supervisor Advertising expense Rent on factory equipment $15.000 $55,000 $250 $75,000 57.000 $11,000 $23,000 x estimates that 15,000 direct labor hours and 20,000 machine-hours will be during the year. If overhead is applied on the basis of Direct Labor Hours Comple the predetermined overhead rate per hour will be: A. $2.80/DLH B. $4.01/DLH C. $5.35/DLH D. $6.75/DLH E. None of the above 2. A company's total overhead cost at various levels of activity is presented belovw Machine-Hours: Total Overhead Cost: March .. April May June 4.000 ...6,000 7,000 $42.005 $35,905 $68.105 $54.205 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 4,000 machine-hour level of activity is as follows: Supervisory salaries (fixed.. $ 8,000 Maintenance (mixed). Total overhead cost 13,90:5 $35,905 Suppose the company uses the high-low method to estimate a cost formula for maintenance. What is the maintenance cost the company expects to incur at an activity level of 8,000 machine hours? A. $20,505 B. $24.305 2/9

Explanation / Answer

1) Calculate predetermine overhead rate :

So answer is c) $5.35/DLH

2) Calculate maintenance cost on 8000 machine hour

Variable cost per machine hour = (54205-35905)/(7000-4000) = 6.1 per machine hour

Fixed cost = 54205-(7000*6.1) = 11505

Maintenance cost on 8000 machine hour = (8000*6.1+11505) = 60305

So answer is 60305

Indirect material 250 Salary for production supervisor 57000 Rent for production equipment 23000 Total Overhead 80250 Estimated labour hour 15000 Predetermine overhead rate 5.35

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---