Question
In: Accounting
X Company wants to estimate overhead costs in March, when production is expected to be 1,500...
X Company wants to estimate overhead costs in March, when
production is expected to be 1,500 units. To determine the
parameters of its overhead cost function, it used account analysis
with the January cost information below and when production was was
1,000 units.
| Total | Total Variable | |
| Utilities | $44,000 | $44,000 |
| Maintenance | 57,000 | 27,360 |
| Supervision | 22,000 | 0 |
Using the resulting cost function, what is X Company's estimate of total overhead costs in March?
Solutions
Expert Solution
| Calculations | A | B | C = A - B | D = B / Number of units (1,000) | E = D x Number of units of March (1,500) | F = E+C |
| Particulars | Total cost | Variable cost | Fixed cost | Variable cost per unit | Variable cost for March | Total costs |
| Utilities | 44,000 | 44,000 | - | 44 | 66000 | 66,000 |
| Maintenance | 57,000 | 27,360 | 29,640 | 27.36 | 41040 | 70,680 |
| Supervision | 22,000 | - | 22,000 | 0 | 0 | 22,000 |
| Total overhead March | 1,58,680 | |||||
ekkarill92 answered 1 year agoRelated Solutions
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