Professional Documents
Culture Documents
ACCT8144
INDIVIDUAL ASSIGNMENT
The factory Overhead costs above consist of indirect materials, rent, and maintenance. The
company has analyzed these costs at the 60,000 machine-hours level of activity as follow:
For planning purposes, the company wants to break down the maintenance costs into its
Variable and Fixed cost elements.
Required:
1. Estimate how much of the factory overhead cost of $312,000 at the high level of activity
consists of maintenance costs. (Hints: to do this, it might be helpful to first determine how
much of the $312,000 cost consist of indirect material and rents. Think about the behavior of
variable and fixed costs)
2. Using the high low method, estimate a cost formula for maintenance.
3. What total overhead cost would you expect the company to incur at an operating level of 75,000
machine hours?
𝐼𝑛𝑑𝑖𝑟𝑒𝑐𝑡 𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙
1. Indirect material cost per machine hour =
𝑀𝑎𝑐ℎ𝑖𝑛𝑒 ℎ𝑜𝑢𝑟𝑠 𝑙𝑒𝑣𝑒𝑙
$ 90,000
=
60,000
= $ 1.5
Maintenance cost = Total Factory Overhead – Indirect material cost – Fixed Cost
= $ 312,000 – $ 120,000 – $ 130,000
= $ 62,000
Jadi maintenance cost pada 80,000 machine hours level adalah sebesar $ 62,000.
( $ 62,000−$ 54,000)
Variabel maintenance cost per hour = ( 80,000− 60,000)
$ 8,000
= 20,000
= $ 0.4 per hour
Required:
Jawaban :