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Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the...

Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations. Month Labor-Hours Machine-Hours Overhead Costs 1 720 1,364 $ 102,688 2 705 1,410 103,821 3 680 1,521 109,893 4 750 1,449 108,341 5 775 1,582 116,197 6 755 1,588 114,500 7 745 1,393 107,042 8 725 1,302 102,055 9 705 1,444 106,344 10 795 1,540 113,137 11 670 1,286 101,526 12 710 1,608 114,728 Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average of 1,600 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation?

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ekkarill92 answered 1 year ago
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Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the...
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Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations: Month Labor-Hours Machine-Hours Overhead Costs 1 730 1,360 $ 102,763 2 715 1,409 103,806 3 670 1,519 109,869 4 745 1,458 108,249 5 785 1,596 116,196 6 755 1,575 114,446 7 750 1,381...
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