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fgiga [73]
3 years ago
10

Bennett Company’s high and low level of activity last year was 150,000 units produced in June and 50,000 units produced in Janua

ry. Machine maintenance costs were $104,000 in June and $40,000 in January. Using the high-low method, estimated total maintenance cost for a month in which 100,000 units will be produced is
Business
2 answers:
ehidna [41]3 years ago
8 0

Answer:

The total maintenance cost at 100,000 units is $72000

Explanation:

The formula for high and low method is given as:

Variable cost=Cost at highest level-Cost at lowest level/(Highest activity-lowest activity)

Variable cost=$104000-$40000/(150000-50000)

                     =$0.64

Total cost= fixed cost+variable cost *volume

Fixed cost can be deduced by substituting the total cost and volume at any of the two activity levels.

$104000=Fixed cost+(0.64*150000)

$104000=Fixed cost+$96000

Fixed cost=$104000-$96000

fixed cost=$8000

Hence total maintenance cost at 100000 units is calculated thus:

Total cost=$8000+(100000*0.64)

Total cost=$72000

yKpoI14uk [10]3 years ago
5 0

Answer:

Total cost= $72,000

Explanation:

Giving the following information:

Bennett Company’s high and low level of activity last year was 150,000 units produced in June and 50,000 units produced in January. Machine maintenance costs were $104,000 in June and $40,000 in January.

We need to use the following formulas:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (104,000 - 40,000) / (150,000 - 50,000)= $0.64 per unit

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

FC= 104,000 - (0.64*150,000)= 8,000

Fixed costs= LAC - (Variable cost per unit* LAU)

FC= 40,000 - (0.64*50,000)= 8,000

Now, we can calculate the cost of 100,000 units:

Total cost= o.64*100,000 + 8,000= $72,000

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Consider Derek's budget information: materials to be used totals $65,100; direct labor totals $198,700; factory overhead totals
egoroff_w [7]

Answer:

cost of goods manufactured= $653,500

Explanation:

Giving the following information:

Consider Derek's budget information: materials to be used totals $65,100; direct labor totals $198,700; factory overhead totals $393,700; work in process inventory January 1, $188,500; and work in progress inventory on December 31, $192,500.

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 188,500 + 65,100 + 198,700 + 393,700 - 192,500= $653,500

5 0
3 years ago
Given the data below for production equipment,Initial Cost, P = $50,000 Salvage Value at the end of 5 years, S = $10,000. Deprec
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Answer:

1. B. $8,000

2. C. $7,200

Explanation:

Units or production (UOP) method of depreciation bases the depreciation expense of a machine or equipment on how much it is actually used during the period.

depreciable value = $50,000 - $10,000 = $40,000

depreciation rate per unit = $40,000 / 25,000 = $1.60

Year          Projected Production units         Actual Production units

1                              4,500                                    5,000

2                             5,000                                    4,000

3                             3,500                                    3,000

4                             5,500                                    5,000

5                             6,500                                    Not known

Total                      25,000

depreciation expense year 4 = $1.60 x 5,000 = $8,000

accumulated depreciation year 4 = $1.60 x 17,000 = $27,200

book value = $50,000 - $27,200 = $22,800

if sold at $30,000, gain resulting from sale = $30,000 - $22,800 = $7,200

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Answer:

B

Explanation:

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