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

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