2. Al-Bustan Co. gathered the following information on total costs and factory machine usage for the last six months: Month January February March Total Cost RO. 14,810 29,210 29,000 19,340 29,810 14,910 Factory Machine Hours 13,900 16,600 6,600 13,200 16,500 6,800 April May June Instructions Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. (a) What is the variable portion of the mixed costs? What is the fixed portion of the mixed costs? (b) (c) If it is estimated that 5,000 factory machine hours will be run in July, what is the expected total cost for July?
2. Al-Bustan Co. gathered the following information on total costs and factory machine usage for the last six months: Month January February March Total Cost RO. 14,810 29,210 29,000 19,340 29,810 14,910 Factory Machine Hours 13,900 16,600 6,600 13,200 16,500 6,800 April May June Instructions Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. (a) What is the variable portion of the mixed costs? What is the fixed portion of the mixed costs? (b) (c) If it is estimated that 5,000 factory machine hours will be run in July, what is the expected total cost for July?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 61P: Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a...
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