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Thomas Ltd., a manufacturing firm, manufactures frames for the Kona Bicycle company. The company has...

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Accounting

Thomas Ltd., a manufacturing firm, manufactures frames for the Kona Bicycle company. The company has supplied information from its accounting records for the last 12 months.

No. of Factory
Month Frames Overhead
Jan 5,000 $ 9,000
Feb 6,000 10,800
Mar 4,400 8,600
Apr 5,800 9,600
May 4,800 9,100
Jun 5,300 9,400
Jul 4,500 7,900
Aug 7,000 13,000
Sep 5,500 10,800
Oct 5,600 10,100
Nov 6,500 13,000
Dec 5,400 9,200

Use the above information to answer the following questions.

1. Using the high-low method calculate the variable rate for factory overhead.

2. Using the high-low method calculate the fixed cost for factory overhead

3.If the total cost of factory overhead equals $11,000 and the company manufacturers 5,500 frames, what is the total factory overhead cost per frame manufactured?

4. If the company increased production of frames by 50% in any given month would the total factory overhead cost per frame increase, decrease or stay the same?

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