Answer:
(A) machine supplies $720,000 property taxes $25,700 since it is a fixed cost (B) plant maintenance cost $1,136,000, fixed cost high level of activity $114,600, low level of activity $114,700, variable cost per machine hour $17.05 per hour (C) 25.98 per hour
Explanation:
The question is not complete here is the missing part of the questions
The following selected data were taken from the accounting records of Colorado Enterprise
Month. Machine Hours. Manufacturing overhead
May. 46,000. $899,000
June. 60,000. $1,130,000
July. 68,000. $1,274,000
August. 52,000. $980,000
Here is the solution
(A) To determine the machine supplies and property for may
899,000 - 179,000
=720,000
To calculate the property taxes, since property taxes is a fixed cost, it is not affected by increases or decreases in the volume of output. It is $25,700
(B) To determine the Maintenance cost
We calculate maintenance cost, we use the level of activity at high level
1,250,000 - ( 68,000 + 46,000)
= 1,250,000 - 114,000
= $1,136,000
To calculate the monthly fixed cost and the variable cost per machine hour
Hour. Total cost
High output. 68,000. 1,274,000
Low output. 46,000. 899,000
--------------- -----------------
22,000. 375,000
------------------- -----------------
Variable cost per machine hour
=375,000/22,000
=$17.05 Per hour
Substituting in either the high or low volume cost
High. Low
Total cost. 1,274,000. 899,000
Variable cost. 1,159,400. 784,300
----------------- ----------------
Fixed cost. 114,600. 114,700
---------------- -----------------
(C) Estimated cost of 56,000 machine hours of output
Total overhead / Total machine hour
Total overhead = machine supplies + property taxes + plant maintenance
= 179,000 + 25,700 + 1,250,000
= 1,454,700
= 1,454,700/ 56,000
= 25.976
= $25.98 per hour
Working of variable cost
68,000 × 17.05 = 1,159,400
46,000 × 17.05 = 784,300
