Question

In: Accounting

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

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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Expert Solution

ekkarill92 answered 3 years ago
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