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P 6A - B High-Low Analysis and Cost Behavior Broccoli Company's total overhead costs vary...

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Accounting

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P 6A - B High-Low Analysis and Cost Behavior Broccoli Company's total overhead costs vary considerably, from month to month, based on direct labor hours. Month August September October November December Labor Hours 3,000 3,400 2,000 2,800 3,600 Total Overhead $234,000 249,200 196,000 226,400 256,800 Their overhead costs consist of indirect labor, supervisor's salary and maintenance. A breakdown of these costs, for the month of October (their low month of activity), follows. Indirect labor (V) Supervisor's salary (F) Maintenance (M) Total overhead costs $60,000 80,000 56,000 $196,000 Required: 1) How much of the December overhead costs (their high month of activity) are maintenance? 2) Using the high-low method, estimate the cost formula for maintenance. 3) Using the high-low method, estimate the cost formula for total overhead. 4) What total overhead costs would you expect at 3,500 labor hours

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