The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct- labor hours as its cost driver for overhead costs. Month January February March April May June Direct-Labor Hours 32,000 34,000 44,000 35,000 39,000 37,000 Manufacturing Overhead $ 696,000 735,000 894,000 753,000 798,000 795,000 March's costs consisted of machine supplies ($228,800), depreciation ($30,000), and plant maintenance ($635,200). These costs exhibit the following respective behavior: variable, fixed, and semivariable. The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost, which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $75,000. The cost is $150,000 from 15,000 to 29,999 hours and $225,000 when activity reaches 30,000 hours or more.
The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct- labor hours as its cost driver for overhead costs. Month January February March April May June Direct-Labor Hours 32,000 34,000 44,000 35,000 39,000 37,000 Manufacturing Overhead $ 696,000 735,000 894,000 753,000 798,000 795,000 March's costs consisted of machine supplies ($228,800), depreciation ($30,000), and plant maintenance ($635,200). These costs exhibit the following respective behavior: variable, fixed, and semivariable. The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost, which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $75,000. The cost is $150,000 from 15,000 to 29,999 hours and $225,000 when activity reaches 30,000 hours or more.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 3E: The following data appeared in the accounting records of Craig Manufacturing Inc., which uses the...
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1 part A: Determine the machine supplies cost and
1 part b: Using the high-low method, analyze Metcalf’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour.
1 part c: Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing
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Step 1: Define Cost Behaviour
VIEWStep 2: Computation of the machine supplies cost and depreciation for January
VIEWStep 3: Computation of plant maintenance cost and calculation of the monthly fixed portion and the variable
VIEWStep 4: Estimation of the total amount of manufacturing overhead the company can expect in November
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