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BUSI 294 Assignment Module 4: Cost Behaviour Prince Company's total overhead costs at various levels...

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Accounting

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BUSI 294 Assignment Module 4: Cost Behaviour Prince Company's total overhead costs at various levels of activity are presented below: Machine Total Month September October November Hours Overhead Cost 113,000 $ 750,650 85,000 612,050 156,000 $ 963,500 162,600 996,170 Assume that the overhead cost above consists of utilities which are billed according to machine hours used, supervisory salaries, depreciation, and maintenance. The breakdown of these costs at the 85,000 machine-hour level of activity in October is as follows: Utilities Supervisory salaries Depreciation 221,000 105,000 4,000 242,050 612,050 Total overhead cost Required 1. Using the high-low method and the information provided above, identify the linear cost function equation for overhead. 2. Estimate the total overhead cost at 100,000 machine hours 3. Prince Company is now budgeting overhead costs for next year. It expects that utilities will increase by 6%, supervisory salaries will be 5% higher and that the variable portion of maintenance costs will increase by 4%. All other costs will remain at this year's level. What is the revised cost function for next year? What should Prince Company budget for total overhead costs at the planned 125,000 machine hours

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