Question
In: Accounting
ABC company incurred the following maintainance costs during the past 6 months Table 1 Months Machine...
ABC company incurred the following maintainance costs during the
past 6 months
Table 1
Months Machine hours Cost $
1 20 4560
2 40 9780
3 50 10920
4 60 11280
5 30 6320
6 90 18920
7 25 5140
8 43 10500
9 70 12400
REQUIRED
Part 1
A. Use the data on Table 1 , estimate the variable and fixed cost
of the company
using the high and low method
B. Develop a cost function for the company.
C. Estimate the maintenance cost if 120 machine hours were used in
July
Part 2
1. Use a scattergraph and the two points that seem to best
represent the relationship
between cost and activity levels of 900 and 300 machine hours. Use
these two
points , estimate the variable cost and the fixed cost [ components
of maintenance
costs]
2. Develop a cost function that the company can use to estimate
maintenance cost at
different volume levels
3. Estimate maintenance costs for July if the company expects to
use 2800 machine
hours
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Kuwait Dental Clinic has incurred the following overhead costs during the past year.
Kuwait Dental Clinic has incurred the following
overhead costs during the past year.MonthNumber ofDental testsOverhead costs
(Y)MonthNumber ofDental testsOverhead costs
(Y)January
9,800173,500July13,000190,200February6,000155,200August9,500171,900March6,800169,100September9,500173,400April7,500170,400October8,700170,800May9,200172,300November14,000195,200June10,200175,900December13,500198,800Required:
Use the high-low method,What is the variable overhead costs per one test?What is the total fixed overhead costs of the Clinic?Predict the level of Clinic’s overhead costs that would be
incurred during a month when 17,000 tests are taken.A-AnswerB-AnswerC-Answer
During the past month, the following costs were incurred in the three production departments and two...
During the past month, the following costs were incurred in the
three production departments and two service departments of Kim
& Co.:
Using Department
Supplying Department
Administration
Factory Support
Fabrication
Assembly
Finishing
Administration
−
0.40
0.30
0.20
0.10
Factory support
0.15
−
0.15
0.15
0.55
Direct cost
$
680,000
$
1,350,000
$
1,760,000
$
288,000
$
258,000
Required:
Allocate service department costs to Fabrication, Assembly, and
Finishing using the reciprocal method, and determine the total
costs of Fabrication, Assembly, and...
During the past month, the following costs were incurred in the three production departments and two...
During the past month, the following costs were incurred in the
three production departments and two service departments of Kim
& Co.:
Using Department
Supplying Department
Administration
Factory Support
Fabrication
Assembly
Finishing
Administration
?
0.40
0.20
0.10
0.30
Factory support
0.10
?
0.10
0.20
0.60
Direct cost
$
570,000
$
1,295,000
$
1,650,000
$
277,000
$
247,000
Required:
Allocate service department costs to Fabrication, Assembly, and
Finishing using the reciprocal method, and determine the total
costs of Fabrication, Assembly, and...
During the past month, the following costs were incurred in the three production departments and two...
During the past month, the following costs were incurred in the
three production departments and two service departments of Kim
& Co.:
Using Department
Supplying Department Administration Factory Support Fabrication
Assembly Finishing
Administration − 0.40 0.30 0.20 0.10
Factory support 0.10 − 0.30
0.10 0.50
Direct cost $ 520,000 $ 1,270,000 $ 1,600,000 $ 272,000 $
242,000
Required: Allocate service department costs to Fabrication,
Assembly, and Finishing using the reciprocal method, and determine
the total costs of Fabrication, Assembly, and...
Taran Company incurred the following costs for the months of January and February. Type of Cost...
Taran Company incurred the following costs for the months of
January and February.
Type of Cost
January
February
Insurance
$ 5,000
$ 5,000
Utilities
4,000
5,000
Depreciation
3,500
3,500
Materials
10,000
20,000
From the information above we can assume that
a.
output decreased from January to February.
b.
insurance is a mixed cost.
c.
output stayed the same from January to February.
d.
insurance and depreciation are fixed costs
ONE: Chrystal Company incurred the following costs for the months of January and February: Type of...
ONE:
Chrystal Company incurred the following costs for the months of
January and February:
Type of Cost January / February
Insurance $7,000 $7,000
Utilities 2,600 3,800
Depreciation 2,000 2,000
Materials 5,000 8,000
Assume that output was 1,000 units in January and 3,000 units in
February, utility cost is a mixed cost, and the fixed cost of
utilities was $2,000. What was the variable rate per unit of output
for utilities cost?
a.$0.40
b.$0.60
c.$0.20
d.$0.30
TWO:
If production volume decreases...
Taran Company incurred the following costs for the months of January and February: Type of Cost...
Taran Company incurred the following costs for the months of
January and February: Type of Cost January February Insurance $
5,000 $ 5,000 Utilities 4,000 5,000 Depreciation 3,500 3,500
Materials 10,000 20,000 If output was 5,000 units in January and
10,000 units in February, we can assume that: a.utilities and
materials are variable costs. b.utilities, insurance, and
depreciation are fixed costs. c.materials are the only variable
cost. d.insurance and depreciation are mixed costs.
Identifying Research and Development Costs Diaz Company incurred the following costs during the year 2020. 1....
Identifying Research and Development Costs
Diaz Company incurred the following costs during the year
2020.
1.
Salaries expense related to design for a trademark with an
indefinite estimated life
$4,800
2.
Materials used for research and development projects for the
current year
8,000
3.
Fees paid to external consultants related to research and
development projects
24,000
4.
Trouble-shooting in connection with breakdowns during
production
14,400
5.
Design of tooling involving new technology
7,200
6.
Cost of equipment (purchased January 2019)...
1.Following are costs incurred in the past year involved with the opening of a new branch...
1.Following are costs incurred in the past year involved with
the opening of a new branch in a company. Use the following
information to calculate the total amount that was debited to the
land account.
Description
Amount
Fee for Title
300
Architect Fee
3,100
Cash paid for land and old building
80,000
Remova lof building
7,000
Salavage Value of Building Removed
1,000
Purchased machinery
10,000
New building constructed
500,000
Assessment by city for building
permit
600
Installation on machinery
1,500...
ABC Company forms in 2020. Prior to operations, ABC incurred $75,000 of startup costs. ABC began...
ABC Company forms in 2020. Prior to operations, ABC incurred
$75,000 of startup costs. ABC began operations in February
2020.
ABC Company is in the construction business and has to make
significant capital expenditures to begin operations. ABC purchased
the following capital assets during the year:
Construction Equipment - $1,500,000
Furniture for its offices - $50,000
Computer Equipment - $250,000
ABC rents its office space from an unrelated third party. The
rent is $20,000 per month.
If ABC elects to...
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