The following information is available regarding the total manufacturing overhea
ID: 2371557 • Letter: T
Question
The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period:
a-1 Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour.
Manufacturing overhead cost $______ per machine hour
a-2 Use the high-low method to determine the fixed element of monthly overhead cost.
Fixed element of manufacturing overhead $_______
b. Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part a to forecast May's manufacturing overhead costs.
Estimated manufacturing overhead $_______
c. Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated these costs?
Amount over (under) estimated
February $______
March $_______
Explanation / Answer
Answer
1)
The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period:
Machine-Hours Manufacturing Overhead
Jan. 5,800 $ 300,000
Feb. 3,200 224,000
Mar. 4,900 263,800
Apr. 2,600 180,000
a-1
Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour
The answer I got was 37.5.
a-2
Use the high-low method to determine the fixed element of monthly overhead cost
The answer I got was 82500
b.
Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part a to forecast May's manufacturing overhead costs.
Estimated manufacturing overhead $ ????? stuck on this
c.
Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amounts would Bursa have over- or underestimated these costs? (Negative amounts should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places. Omit the "$" sign in your response.)
Amount over (under) estimated
February $ ???? stuck on this
March $ ???? stuck on this
2) Malibu Corporation has monthly fixed costs of $56,000. It sells two products for which it has provided the following information:
Sales Price Contribution Margin
Product 1 $10 $ 6
Product 2 $10 $ 3
a.
What total monthly sales revenue is required to break even if the relative sales mix is 40 percent for Product 1 and 60 percent for Product 2?
Sales revenue $ ??? stuck on this
b.
What total monthly sales revenue is required to earn a monthly operating income of $12,000 if the relative sales mix is 25 percent for Product 1 and 75 percent for Product 2?
Sales revenue $ ????stuck on this.
If you can explain how you got the answer on one or both of these problems that would be great!! thank you.
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