The following selected data were taken from the accountingrecords of Metcalf Manufacturing. The company uses direct-laborhours as its cost driver for overhead costs.
| Month | Direct-Labor
Hours | Manufacturing
Overhead |
| January | 31,000 | $ | 695,000 | |
| February | 33,000 | | 734,000 | |
| March | 43,000 | | 893,000 | |
| April | 34,000 | | 752,750 | |
| May | 38,000 | | 796,500 | |
| June | 36,000 | | 793,500 | |
|
March’s costs consisted of machine supplies ($219,300),depreciation ($29,500), and plant maintenance ($644,200). Thesecosts exhibit the following respective behavior: variable, fixed,and semivariable.
The manufacturing overhead figures presented in the precedingtable do not include Metcalf’s supervisory labor cost, which isstep-fixed in nature. For volume levels of less than 15,000 hours,supervisory labor amounts to $74,500. The cost is $149,000 from15,000–29,999 hours and $223,500 when activity reaches 30,000 hoursor more.
Required:
1. Determine the machine supplies cost anddepreciation for January.
2. Using the high-low method, analyze Metcalf’splant maintenance cost and calculate the monthly fixed portion andthe variable cost per direct-labor hour.
3. Assume that present cost behavior patternscontinue into the latter half of the year. Estimate the totalamount of manufacturing overhead the company can expect in Novemberif 29,300 direct-labor hours are worked.
