The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for...
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Accounting
The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period.
Machine- Hours
Manufacturing Overhead
January
6,000
$
300,000
February
3,200
224,000
March
4,900
263,800
April
2,900
180,000
a-1. Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour. (Round your answer to 2 decimal places.)
a-2. Use the high-low method to determine the fixed element of monthly overhead cost.
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.
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?
a-1.
Manufacturing overhead cost
per machine hour
a-2.
Fixed element of monthly overhead cost
b.
Estimated manufacturing overhead cost
Amount
c.
February
March
Answer & Explanation
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