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X Company's accountant developed a cost fuction to predict monthly overhead costs, with units produced as...

X Company's accountant developed a cost fuction to predict monthly overhead costs, with units produced as the single independent variable.She analyzed the following total overhead costs in March to develop the parameters of the cost function:

Supplies $29,100

Utilities 22,800

Maintenance 18,900

Insurance 12,400

The accountant classified these costs as follows: supplies were all variable; insurance was all fixed; variable utility costs were $15,960; fixed maintenance costs were $1,890.

March production was 1,000 units; June production is expected to be 1,200 units.

What is the accountant's estimate of variable overhead costs per unit in June [round variable costs per unit to two decimal places]?

Solutions

Expert Solution

Calculate variable overhead cost per unit in june :

Supplies (29100/1000) 29.10
Utilities (15960/1000) 15.96
Maintenance (18900-1890)/1000 17.01
Total variable overhead cost per unit for june 62.07

ekkarill92 answered 2 years ago
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