Question

In: Accounting

Baker Corporation has provided the following production and average cost data for two levels of monthly...

Baker Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.

Production volume 1,190 units 4,690 units
Direct materials $ 32.80 per unit $ 32.80 per unit
Direct labor $ 42.10 per unit $ 42.10 per unit
Manufacturing overhead $ 67.00 per unit $ 27.00 per unit


The best estimate of the total variable manufacturing cost per unit is:

$32.80

$13.40

$88.30

$74.90

Solutions

Expert Solution

Answer:
Production Volume = 1,190 Units:

Manufacturing Overhead = $67.00 * 1,190
Manufacturing Overhead = $79,730

Production Volume = 4,690 Units:
Manufacturing Overhead = $27.00 * 4,690
Manufacturing Overhead = $126,630

As per High- Low method,     
Variable Cost per Unit = (y2 – y1)/ (x2 – x1)
Total Manufacturing Overhead cost at the highest level of activity (y2) = $126,630
Total Manufacturing Overhead cost at the lowest level of activity (y1) = $79,730
Units at highest level of activity (x2) = 4,690 units
Units at lowest level of activity (x1) = 1,190 units

Variable Manufacturing Overhead cost per unit = ($126,630 - $79,730) / (4,690 – 1,190)
Variable Manufacturing Overhead cost per unit = $46,900 / 3,500
Variable Manufacturing Overhead cost per unit = $13.40

Total Variable Manufacturing Cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead
Total Variable Manufacturing Cost per unit = $32.80 + $42.10 + $13.40
Total Variable Manufacturing Cost per unit = $88.30


Related Solutions

Antico Corporation has provided the following production and average cost data for two levels of monthly...
Antico Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. # of units produced 4,000 5,000 Direct material cost per unit $3.20 $3.20 Direct labor cost per unit $4.50 $4.50 Total MOH cost per unit $9.40 $7.70 Variable S&A per unit $1.20 $1.20 Fixed S&A per unit $6.00 $4.80 The best estimate of the fixed element of total monthly manufacturing cost is (round to the nearest...
Edent Corporation has provided the following production and average cost data for two levels of monthly...
Edent Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. Production volume 4,300 units 5,300 units Direct materials $ 78.90 per unit $ 78.90 per unit Direct labor $ 52.20 per unit $ 52.20 per unit Manufacturing overhead $ 77.30 per unit $ 68.30 per unit The best estimate of the total cost to manufacture 5,000 units is closest to: (Round your intermediate calculations to 2...
Baaca Corporation has provided the following production and total cost data for two levels of monthly...
Baaca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. Production Volume 6000 units 7000 units Direct Materials $340,200 $396,900 Direct Labor $81,000 $94,500 Manufacturing Overhead $1,003,200 $1,015,000 The estimated total cost to manufacture 6300 units would be:
The controller of Blossom Production has collected the following monthly expense data for analyzing the cost...
The controller of Blossom Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs. Total Electricity Costs Total Machine Hours January $2,660 230 February 3,050 330 March 3,520 460 April 4,770 690 May 3,190 420 June 4,960 790 July 4,030 650 August 3,870 590 September 5,040 670 October 4,270 610 November 3,260 330 December 8,460 810 (a) Determine the fixed- and variable-cost components using the high-low method. Fixed-costs $ Variable-costs $ eTextbook and Media...
The controller of Blossom Production has collected the following monthly expense data for analyzing the cost...
The controller of Blossom Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs. Total Electricity Costs Total Machine Hours January $2,660 230 February 3,050 330 March 3,520 460 April 4,770 690 May 3,190 420 June 4,960 790 July 4,030 650 August 3,870 590 September 5,040 670 October 4,270 610 November 3,260 330 December 6,720 810 What electricity cost does the cost equation estimate for a level of activity of 790 machine hours? Electricity...
Cost of Production Report: Average Cost Method Use the average cost method with the following data:...
Cost of Production Report: Average Cost Method Use the average cost method with the following data: Work in process, January 1, 7,000 units, 10% completed $45,080 Materials added during January from Weaving Department, 132,300 units 828,198 Direct labor for January 213,267 Factory overhead for January 167,967 Goods finished during January (includes goods in process, January 1), 129,500 units — Work in process, January 31, 9,800 units, 70% completed — Prepare a cost of production report for the Cutting Department of...
Cost of Production Report: Average Cost Method Use the average cost method with the following data:...
Cost of Production Report: Average Cost Method Use the average cost method with the following data: Work in process, January 1, 4,800 units, 90% completed $45,696 Materials added during January from Weaving Department, 90,700 units 838,975 Direct labor for January 209,953 Factory overhead for January 140,392 Goods finished during January (includes goods in process, January 1), 88,800 units — Work in process, January 31, 6,700 units, 30% completed — Prepare a cost of production report for the Cutting Department of...
Cost of Production Report: Average Cost Method Use the average cost method with the following data:...
Cost of Production Report: Average Cost Method Use the average cost method with the following data: Work in process, December 1, 7,400 units, 10% completed $72,002 Materials added during December from Weaving Department, 139,900 units 1,322,055 Direct labor for December 340,697 Factory overhead for December 269,348 Goods finished during December (includes goods in process, December 1), 136,900 units — Work in process, December 31, 10,400 units, 70% completed — Prepare a cost of production report for the Cutting Department of...
Cost of Production Report: Average Cost Method Use the average cost method with the following data:...
Cost of Production Report: Average Cost Method Use the average cost method with the following data: Work in process, December 1, 6,700 units, 70% completed $52,997 Materials added during December from Weaving Department, 126,600 units 972,288 Direct labor for December 239,818 Factory overhead for December 145,589 Goods finished during December (includes goods in process, December 1), 123,900 units — Work in process, December 31, 9,400 units, 10% completed — Prepare a cost of production report for the Cutting Department of...
Cost of Production Report: Average Cost Method Use the average cost method with the following data:...
Cost of Production Report: Average Cost Method Use the average cost method with the following data: Work in process, December 1, 5,500 units, 20% completed $40,040 Materials added during December from Weaving Department, 103,900 units 734,573 Direct labor for December 187,974 Factory overhead for December 143,141 Goods finished during December (includes goods in process, December 1), 101,700 units — Work in process, December 31, 7,700 units, 60% completed — Prepare a cost of production report for the Cutting Department of...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT